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Title:Multinationals, minority ownership and tax-efficient financing structures PDF Logo
Authors:Schindler, Dirk
Schjelderup, Guttorm
Issue Date:2010
Series/Report no.:CESifo working paper Public Finance 3034
Abstract:This paper presents a theory model that simultaneously accounts for the financing decisions and ownership structure in affiliates of multinational firms. We find that affiliates of multinationals have higher internal and overall debt ratios and lower rental rates of physical capital than comparable domestic firms. We also show that affiliates with minority owners have less debt than wholly owned affiliates and a less tax-efficient financing structure. The latter is due to an externality whereby minority ownership dampens the incentive to avoid taxes through the use of internal debt.
Subjects:multinationals
tax-efficient financing structures
minority ownership
JEL:H25
F23
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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