Capital Structure And International Debt Shifting
Download Capital Structure And International Debt Shifting full books in PDF, epub, and Kindle. Read online free Capital Structure And International Debt Shifting ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
Author | : Mr.Luc Laeven |
Publisher | : International Monetary Fund |
Total Pages | : 39 |
Release | : 2007-02-01 |
Genre | : Business & Economics |
ISBN | : 1451866038 |
This paper presents a model of a multinational firm's optimal debt policy that incorporates international taxation factors. The model yields the prediction that a multinational firm's indebtedness in a country depends on a weighted average of national tax rates and differences between national and foreign tax rates. These differences matter because multinationals have an incentive to shift debt to high-tax countries. The predictions of the model are tested using a novel firm-level dataset for European multinationals and their subsidiaries, combined with newly collected data on the international tax treatment of dividend and interest streams. Our empirical results show that corporate debt policy indeed not only reflects domestic corporate tax rates but also differences in international tax systems. These findings contribute to our understanding of how corporate debt policy is set in an international context.
Author | : |
Publisher | : |
Total Pages | : 0 |
Release | : 2011 |
Genre | : |
ISBN | : 9783844379679 |
Author | : Jarle Moen |
Publisher | : |
Total Pages | : |
Release | : 2009 |
Genre | : |
ISBN | : |
Author | : Harry Huizinga |
Publisher | : |
Total Pages | : 42 |
Release | : 2006 |
Genre | : International business enterprises |
ISBN | : 9789279038396 |
Author | : Jarle Møen |
Publisher | : |
Total Pages | : |
Release | : 2019 |
Genre | : |
ISBN | : |
Author | : Ms.Grace Weishi Gu |
Publisher | : International Monetary Fund |
Total Pages | : 35 |
Release | : 2012-11-30 |
Genre | : Business & Economics |
ISBN | : 147554068X |
This paper explores how corporate taxes affect the financial structure of multinational banks. Guided by a simple theory of optimal capital structure it tests (i) whether corporate taxes induce subsidiary banks to raise their debt-asset ratio in light of the traditional debt bias; and (ii) whether international corporate tax differentials vis-a-vis foreign subsidiary banks affect the intra-bank capital structure through international debt shifting. Using a novel subsidiary-level dataset for 558 commercial bank subsidiaries of the 86 largest multinational banks in the world, we find that taxes matter significantly, through both the traditional debt bias channel and the international debt shifting that is due to the international tax differentials. The latter channel is more robust and tends to be quantitatively more important. Our results imply that taxation causes significant international debt spillovers through multinational banks, which has potentially important implications for tax policy.
Author | : Ruud A. de Mooij |
Publisher | : International Monetary Fund |
Total Pages | : 20 |
Release | : 2017-02-10 |
Genre | : Business & Economics |
ISBN | : 1475578296 |
Tax provisions favoring corporate debt over equity finance (“debt bias”) are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate financial stability risk. We find that rules targeted at related party borrowing (the majority of today’s rules) have no significant impact on debt bias—which relates to third-party borrowing. Also, these rules have no effect on broader indicators of firm financial distress. Rules applying to all debt, in contrast, turn out to be effective: the presence of such a rule reduces the debt-asset ratio in an average company by 5 percentage points; and they reduce the probability for a firm to be in financial distress by 5 percent. Debt ratios are found to be more responsive to thin capitalization rules in industries characterized by a high share of tangible assets.
Author | : Ruud A. de Mooij |
Publisher | : International Monetary Fund |
Total Pages | : 25 |
Release | : 2011-05-03 |
Genre | : Business & Economics |
ISBN | : 1463935137 |
Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.
Author | : International Monetary Fund. Fiscal Affairs Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 78 |
Release | : 2016-12-10 |
Genre | : Business & Economics |
ISBN | : 1498345204 |
Risks to macroeconomic stability posed by excessive private leverage are significantly amplified by tax distortions. ‘Debt bias’ (tax provisions favoring finance by debt rather than equity) has increased leverage in both the household and corporate sectors, and is now widely recognized as a significant macroeconomic concern. This paper presents new evidence of the extent of debt bias, including estimates for banks and non-bank financial institutions both before and after the global financial crisis. It presents policy options to alleviate debt bias, and assesses their effectiveness. The paper finds that thin capitalization rules restricting interest deductibility have only partially been able to address debt bias, but that an allowance for corporate equity has generally proved effective. The paper concludes that debt bias should feature prominently in countries’ tax reform plans in the coming years.
Author | : Asl? Demirgüç-Kunt |
Publisher | : World Bank Publications |
Total Pages | : 44 |
Release | : 1994 |
Genre | : Capital |
ISBN | : |
Variables that predict capital structure in the United States also predict choices of capital structure in a sample of ten developing countries. In several countries, total indebtedness is negatively related to net fixed assets, suggesting that markets for long- term debt do not function effectively.