EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/25862
  
Title:The impact of thin-capitalization rules on multinationals' financing and investment decisions PDF Logo
Authors:Büttner, Thiess
Overesch, Michael
Schreiber, Ulrich
Wamser, Georg
Issue Date:2006
Series/Report no.:CESifo working paper 1817
Abstract:This paper analyzes the role of Thin-Capitalization rules for capital structure choice and investment decisions of multinationals. A theoretical analysis shows that the imposition of such rules tends to affect not only the leverage and the level of investment but also their taxsensitivity. An empirical investigation of leverage and investment reported for affiliates of German multinationals in 24 countries in the period between 1996 and 2004 offers some support for the theoretical predictions. While Thin-Capitalization rules are found to be effective in restricting debt finance, investment is found to be more sensitive to taxes if debt finance is restricted.
JEL:H25
H26
G32
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
518889335.PDF229.24 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/25862

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.