Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123720
Authors: 
Dreßler, Daniel
Scheuering, Uwe
Year of Publication: 
2015
Series/Report no.: 
ZEW Discussion Papers 12-046 [rev.]
Abstract: 
This paper empirically estimates the effects of a new thin-capitalization rule on the financing behavior of German corporations employing a fixed effects difference-in-difference approach. We compare treatment and control groups separated by a hypothetical application of the new rule in three years before its introduction. Our analysis does not provide empirical evidence for a pure interest barrier effect. This indicates that the few affected firms were either unable to reduce their leverage or used exceptions. The observable trend towards less debt might stem from a general preference for lower debt ratios after the crisis or from the tax rate cut, which was introduced simultaneously.
Subjects: 
Capital Structure
Corporate Taxation
Interest Barrier
Empirical Analysis
Firm-Level Data
JEL: 
F23
H25
H32
Document Type: 
Working Paper

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