Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/228792 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 016.2020
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
In this article we introduce model to describe the behavior of a multinational company (MNC) that operates transfer pricing and debt shifting, with the purpose of incrementing its value, intended as the sum of equity and debt. We compute, in a stochastic environment and under default risk, the optimal shares of profit and debt to be shifted and show how they are affected by exogenous features of the market. In addition, by means of a numerical analysis, we simulate and quantify the benefit arising from the exploitation of tax avoidance practices and study the corresponding impact on MNC's fundamental indicators. A wide sensitivity analysis on model's parameters is also provided.
Subjects: 
Capital Structure
Default Risk
Business Taxation and Welfare
JEL: 
H25
G33
G38
Document Type: 
Working Paper

Files in This Item:
File
Size





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