multinational groups. We model the trade-off between the use of external debt, parental debt and an internal bank. We test the …: (i) smaller firms often rely on parental debt financing; (ii) larger multinationals are more likely to use internal banks …; (iii) parental debt and external debt are substitutes and the mix depends on the relative cost of raising capital through …

multinational firms show that the tax sensitivity of debt is more modest than what one would expect given the incentives for profit … that pertains to the use of debt. …

Multinational companies can exploit the tax advantage of debt more aggressively than national companies. Besides … utilizing the standard debt tax shield, multinationals can shift debt from affiliates in low-tax countries to affiliates in high …-tax countries. We study the capital structure of multinationals and expand previous theory by incorporating debt tax shield effects …

That most corporate tax systems favor debt over equity finance is now widely recognized as, potentially, amplifying …

-country variability, showing a stronger effect for less levered firms. In accordance with the theory of the debt tax shield, the relation … between debt and taxation is stronger for highly profitable firms. These findings are robust to the inclusion of different …