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Short-term and long-term government debt and nonresident interest withholding taxes

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  • Eijffinger, Sylvester C. W.
  • Huizinga, Harry P.
  • Lemmen, Jan J. G.

Abstract

This paper examines the incidence of nonresident interest withholding taxes in the international 3-month Treasury-bill market and the international 5-year government bond market. The approach is one of the pooled cross-section, time-series regressions. The evidence suggests that the yields on national Treasury-bill and on 5-year government bonds fully reflect the nonresident interest withholding taxes imposed on American or Japanese investors. Nonresident interest withholding taxes on short-term and long-term government debt thus do not appear to be borne by the international investor.
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Suggested Citation

  • Eijffinger, Sylvester C. W. & Huizinga, Harry P. & Lemmen, Jan J. G., 1998. "Short-term and long-term government debt and nonresident interest withholding taxes," Journal of Public Economics, Elsevier, vol. 68(3), pages 309-334, June.
  • Handle: RePEc:eee:pubeco:v:68:y:1998:i:3:p:309-334
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Demirguc, Asli & Huizinga, Harry, 1999. "Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence," World Bank Economic Review, World Bank Group, vol. 13(2), pages 379-408, May.
    2. Uhlig, Harald, 1997. "Long Term Debt and the Political Support of a Monetary Union," CEPR Discussion Papers 1603, C.E.P.R. Discussion Papers.
    3. Landon, Stuart, 2009. "The capitalization of taxes in bond prices: Evidence from the market for Government of Canada bonds," Journal of Banking & Finance, Elsevier, vol. 33(12), pages 2175-2184, December.
    4. Landon, Stuart & Smith, Constance, 2008. "Taxation and bond market investment strategies: Evidence from the market for Government of Canada bonds," MPRA Paper 9959, University Library of Munich, Germany.
    5. Huizinga, Harry & Nicodeme, Gaetan, 2004. "Are international deposits tax-driven," Journal of Public Economics, Elsevier, vol. 88(6), pages 1093-1118, June.

    More about this item

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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