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Multinational corporations can shift income into low-tax countries through transfer pricing and debt financing. While most developed countries use thin capitalization rules to limit the extent to which a subsidiary can be financed with internal debt, a number of developing countries do not. In...
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This paper analyzes tax competition when welfare maximizing jurisdictions levy source-based corporate taxes and multinational enterprises choose tax-efficient capital-to-debt ratios. Under separate accounting, multinationals shift debt from low-tax to high-tax countries. The Nash equilibrium of...
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domestic firms and financial leverage by examining 146 Medium Enterprises (MEs). The results show that except for ownership …, the business sector, firm age, foreign ownership level, and financial leverage significantly influence performance …. Foreign ownership substantially mediates the correlation between firm age and performance but not leverage. Both foreign …
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