Büttner, Thiess
[VerfasserIn]
;
Overesch, Michael
[Sonstige Person, Familie und Körperschaft];
Schreiber, Ulrich
[Sonstige Person, Familie und Körperschaft];
Wamser, Georg
[Sonstige Person, Familie und Körperschaft]
The Impact of Thin-Capitalization Rules on Multinationals' Financing and Investment Decisions
Erschienen in:Bundesbank Series 1 Discussion Paper ; No. 2008,03
Umfang:
1 Online-Ressource (56 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2785182
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2008 erstellt
Beschreibung:
This paper analyzes the effectiveness of thin-capitalization rules in preventing debt finance by intercompany loans and explores their consequences for corporate decisions. A theoretical discussion emphasizes that limitations of the deduction of interest owed to foreign affiliates would not only affect multinationals' capital structure choice but also investment. An empirical investigation exploits a large firm-level panel dataset of multinationals in order to analyze the impact of thin-capitalization rules on capital structure choice and investment in the OECD and some further European countries in the time period between 1996 and 2004. The results indicate that thin-capitalization rules are effective in curbing tax planning via intercompany loans. However, investment is found to be adversely affected