Capital Structure and International Debt Shifting: A Comment
In a recent article, Huizinga, Laeven and Nicodème (2008) present a novel model that motivates an extensive empirical analysis of international debt shifting. We point out that the model fails to account for internal debt, and that once internal debt is properly accounted for, the external debt mechanism they propose is not identified in the empirical analysis. We also point out that affiliate specific debt costs reduce affiliate dividends. When this is implemented in the model, their regression equation can only be derived under the very restrictive assumption that effective tax rates on dividends are the same in all countries.
|Date of creation:||22 Aug 2008|
|Contact details of provider:|| Postal: NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway|
Phone: +47 55 95 92 93
Fax: +47 55 95 96 50
Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chowdhry, Bhagwan & Coval, Joshua D., 1998. "Internal financing of multinational subsidiaries: Debt vs. equity1," Journal of Corporate Finance, Elsevier, vol. 4(1), pages 87-106, March.
- Leechor, Chad & Mintz, Jack, 1993. "On the taxation of multinational corporate investment when the deferral method is used by the capital exporting country," Journal of Public Economics, Elsevier, vol. 51(1), pages 75-96, May.
- Mihir A. Desai & C. Fritz Foley & James R. Hines, 2004.
"A Multinational Perspective on Capital Structure Choice and Internal Capital Markets,"
Journal of Finance,
American Finance Association, vol. 59(6), pages 2451-2487, December.
- Mihir A. Desai & C. Fritz Foley & James R. Hines, Jr., 2003. "A Multinational Perspective on Capital Structure Choice and Internal Capital Markets," NBER Working Papers 9715, National Bureau of Economic Research, Inc.
- Jack Mintz & Alfons Weichenrieder, 2005. "Taxation and the Financial Structure of German Outbound FDI," CESifo Working Paper Series 1612, CESifo Group Munich.
- Buettner, Thiess & Overesch, Michael & Schreiber, Ulrich & Wamser, Georg, 2009.
"Taxation and capital structure choice--Evidence from a panel of German multinationals,"
Elsevier, vol. 105(3), pages 309-311, December.
- Büttner, Thiess & Overesch, Michael & Schreiber, Ulrich & Wamser, Georg, 2006. "Taxation and capital structure choice: evidence from a panel of German multinationals," ZEW Discussion Papers 06-67, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Thiess Buettner & Michael Overesch & Ulrich Schreiber & Georg Wamser, 2006. "Taxation and Capital Structure Choice – Evidence from a Panel of German Multinationals," CESifo Working Paper Series 1841, CESifo Group Munich.
- Thiess Buettner & Georg Wamser, 2007. "Intercompany Loans and Profit Shifting – Evidence from Company-Level Data," CESifo Working Paper Series 1959, CESifo Group Munich.
When requesting a correction, please mention this item's handle: RePEc:hhs:nhhfms:2008_015. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stein Fossen)
If references are entirely missing, you can add them using this form.