This paper examines the impact of thin capitalization rules that limit the tax deductibility of interest on the capital structure of the foreign affiliates of US multinationals. We construct a new data set on thin capitalization rules in 54 countries for the period 1982-2004. Using confidential...

The extent to which domestic and foreign operations of multinational corporations (MNCs) are related has important implications for the analysis of investment demand and its responsiveness to tax policy. We estimate the structural parameters of a model in which domestic and foreign investment...