Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24522
Authors: 
Büttner, Thiess
Overesch, Michael
Schreiber, Ulrich
Wamser, Georg
Year of Publication: 
2006
Series/Report no.: 
ZEW Discussion Papers 06-67
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.
Subjects: 
Corporate Income Tax
Multinationals
Capital Structure
Firm-Level Data
JEL: 
H25
G32
H26
Document Type: 
Working Paper

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