This paper compares domestically and foreign-owned plants with respect to their debt-toassets ratio and analyzes to which extent the difference is systematically affected by corporate taxation. To derive hypotheses about influence of corporate taxation on a firm's debt financing we adapt a...

Die Zinsschranke ist ein Instrument der Unternehmenssteuerreform 2008. Sie soll verhindern, dass international agierende Unternehmen ihre Gewinne über Fremdfinanzierung ins Ausland verlagern. Die Ergebnisse der vorliegenden Untersuchung sprechen dafür, dass multinationale Unternehmen...

Deutschland besitzt seit 1994 eine Regelung, die der Gewinnverlagerung multinationaler Konzerne mittels interner Fremdfinanzierung einen Riegel vorschieben soll. Trotz Nachbesserungen in den Jahren 2001 und 2004 war diese nach den bisherigen empirischen Untersuchungen wenig effektiv und...

There is a growing concern that governments lose substantial corporate tax revenue due to transfer pricing and debt shifting strategies. Existing literature studies debt shifting and transfer pricing separately. In practice, however, the choice of debt-to-asset ratios in affiliates and the...

This paper examines the flexibility of multinational firms to use income-shifting strategies within a tax year to react to operating losses. First, we develop an analytical model that considers how affiliate losses can be adjusted by using the transfer prices of tangible and intangible assets,...

In the absence of financial frictions, the purpose of thin capitalization rules is to limit multinational firms’ possibilities of engaging in tax planning via debt shifting. This paper analyzes the effects of thin capitalization rules in the case where firms have limited access to external...

This paper explores how corporate taxes affect the capital structure of multinational banks. Guided by a theory of optimal capital structure, it tests whether (i) corporate tax rates induce subsidiary banks to raise leverage in light of traditional debt bias; and (ii) cross-country corporate tax...

This article aims to analyze the link between subsidiary capital structure and taxation in Europe. First we have introduced a trade-off model, which looks at a MNC’s financial strategy and in particular debt shifting from low-tax to high-tax jurisdictions. By letting the MNC choose both...

This paper develops a theoretical model of multinational firms with an internal capital market. Main reasons for the emergence of such a market are tax avoidance through debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The model serves to...

This paper develops a theory of corporate ownership and leverage of multi- ple firms under a tax-bankruptcy trade-off, allowing for internal bailouts. It then questions whether tax policy contributes to the default of the resulting complex or- ganization. Absent other taxes and non-financial...