Capital structure and international debt shifting

• 成果类型: Article
• 署名作者: Huizinga, Harry; Laeven, Luc; Nicodeme, Gaetan
• 署名单位: Tilburg University; International Monetary Fund; Universite Libre de Bruxelles
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2007.05.006
• 发表日期: 2008
• 页码: 80-118
• 关键词: Corporate taxation; Financial structure; debt shifting

摘要

This paper presents a model of a multinational firm's optimal debt policy that incorporates international taxation factors. The model yields the prediction that a multinational firm's indebtedness in a country depends on a weighted average of national tax rates and differences between national and foreign tax rates. These differences matter as multinationals have an incentive to shift debt to high-tax countries. The predictions of the model are tested using a novel firm-level dataset for European multinationals and their subsidiaries, combined with newly collected data on the international tax treatment of dividend and interest streams. Our empirical results show that a foreign subsidiary's capital structure reflects local corporate tax rates as well as tax rate differences vis-A-vis the parent firm and other foreign subsidiaries, although the overall economic effect of taxes on leverage appears to be small. Ignoring the international debt shifting arising from differences in national tax rates would understate the impact of national taxes on debt policies by about 25%. (C) 2008 Elsevier B.V. All rights reserved.