This paper analyzes how multinational enterprises respond to a restriction on interest deductions incurred for internal borrowing. The emphasis of the study is on a firm's response with respect to external borrowing. The empirical investigation applies propensity score matching techniques and...

This paper analyzes the impact of taxes and lending conditions on the financial structure of multinationals’ foreign affiliates. The empirical analysis employs a large panel of affiliates of German multinationals in 26 countries in the period from 1996 until 2003. In accordance with the...

This paper analyzes the impact of taxes and lending conditions on the financial structure of multinationals' foreign affiliates. The empirical analysis employs a large panel of affiliates of German multinationals in 26 countries in the period from 1996 until 2003. In accordance with the...

This paper provides empirical evidence on two potential costs of shared ownership of German affiliates abroad. First, in periods of currency crises, wholly-owned affiliates, in contrast to partially-owned affiliates, seem to circumvent financial constraints by accessing capital from their parent...