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Title:Taxation and capital structure choice: evidence from a panel of German multinationals PDF Logo
Authors:Buettner, Thiess
Overesch, Michael
Schreiber, Ulrich
Wamser, Georg
Issue Date:2006
Series/Report no.:CESifo working paper 1841
Abstract: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 theoretical predictions, the effect of local taxes on leverage is positive for both types of debt. Moreover, while adverse local credit market conditions are found to reduce external borrowing, internal debt is increasing, supporting the view that the two channels of debt finance are substitutes.
JEL:H25
H26
G32
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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