The Impact of Thin-Capitalization Rules on Multinationals’ Financing and Investment Decisions


Buettner, Thiess ; Overesch, Michael ; Schreiber, Ulrich ; Wamser, Georg


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URL: https://ub-madoc.bib.uni-mannheim.de/1452
URN: urn:nbn:de:bsz:180-madoc-14529
Document Type: Working paper
Year of publication: 2006
The title of a journal, publication series: ZEW Discussion Papers
Volume: 06-068
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H25 H26 G32 ,
Subject headings (SWD): Körperschaftsteuer , Unterkapitalisierung , Multinationales Unternehmen , Einfluss
Keywords (English): Corporate Income Tax , Multinationals , Leverage , Thin-Capitalization Rules , Firm-Level Data
Abstract: This paper analyzes the role of Thin-Capitalization rules for capital structure choice and investment decisions of multinationals. A theoretical analysis shows that the imposition of such rules tends to affect not only the leverage and the level of investment but also their tax-sensitivity. An empirical investigation of leverage and investment reported for affiliates of German multinationals in 24 countries in the period between 1996 and 2004 offers some support for the theoretical predictions. While Thin-Capitalization rules are found to be effective in restricting debt finance, investment is found to be more sensitive to taxes if debt finance is restricted.
Additional information:

Dieser Eintrag ist Teil der Universitätsbibliographie.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Buettner, Thiess ; Overesch, Michael ; Schreiber, Ulrich ; Wamser, Georg (2006) The Impact of Thin-Capitalization Rules on Multinationals’ Financing and Investment Decisions. Open Access ZEW Discussion Papers Mannheim 06-068 [Working paper]
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