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Taxation and capital structure choice--Evidence from a panel of German multinationals

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  • Buettner, Thiess
  • Overesch, Michael
  • Schreiber, Ulrich
  • Wamser, Georg
Abstract
The capital structure of foreign affiliates is analyzed using a large panel of German multinationals. While taxes are found to encourage debt finance in general, adverse local credit market conditions result in lower external borrowing but higher internal debt indicating that the two channels of debt finance are substitutes.

Suggested Citation

  • Buettner, Thiess & Overesch, Michael & Schreiber, Ulrich & Wamser, Georg, 2009. "Taxation and capital structure choice--Evidence from a panel of German multinationals," Economics Letters, Elsevier, vol. 105(3), pages 309-311, December.
    • Handle: RePEc:eee:ecolet:v:105:y:2009:i:3:p:309-311
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    More about this item

    Keywords

    Corporate income tax Multinationals Capital structure Internal debt Firm-level data;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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