Working Paper
The Capital Structure of Multinational Companies under Tax Competition
Paolo Panteghini
CESifo, Munich, 2006
CESifo Working Paper No. 1721
CESifo, Munich, 2006
CESifo Working Paper No. 1721
![](https://cesifo.org/DocImg/cesifo1_wp1721.jpg?c=1689237169)
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.
CESifo Category
Public Finance
Public Finance
Keywords: capital structure, country risk, default, multinationals, tax competition
JEL Classification: G310,H250,H320