The Capital Structure of Multinational Companies Under Tax Competition

Paolo Panteghini

Working Papers from University of Brescia, Department of Economics

Abstract: This article studies the relationship between debt policies of multinational companies (MNCs) and governments' tax strategies. In the first part, it is shown that the ability to shift income from high to low-tax countries affects MNCs' financial choices. In the second part we show how MNCs' financial decisions can affect the tax strategies of two governments competing to attract income. Furthermore we show that, for reasonable levels of risk aversion, the use of an equally weighted portfolio is surprisingly consistent with an expected utility maximizing behavior.

Date: 2006
New Economics Papers: this item is included in nep-acc, nep-cfn, nep-fin, nep-fmk, nep-pbe and nep-upt
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: The capital structure of multinational companies under tax competition (2009)
Working Paper: The Capital Structure of Multinational Companies under Tax Competition (2006)
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