Local Taxes and Capital Structure Choice
Reint E. Gropp
International Tax and Public Finance,
Nr. 1,
2002
Abstract
This paper investigates the question of taxation and capital structure choice in Germany. Germany represents an excellent case study for investigating the question of whether and to what extent taxes influence the debt-equity decision of firms, because the relative tax burdens on debt and equity vary greatly across communities. German communities levy local taxes on profits and long-term debt payments in addition to personal and corporate taxes on the federal level. A stylized model is presented incorporating these taxes. The model shows that local taxes create substantial incentives for firms to use debt financing. Furthermore, the paper empirically investigates the effect of local business taxes on the share of debt used to finance incremental investments by German firms. I find that local taxes significantly influence the capital structure choice of firms, controlling for a large number of other factors. In an extensive sensitivity analysis the tax effect are found to be robust across several different specifications.
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Korean Unification and Banking System - An Analysis in View of German Experiences and Korean Differences
Ralf Müller
IWH Discussion Papers,
Nr. 139,
2001
Abstract
One of the reforms that have to be launched in a future unification process in Korea, which seems possible after the political negotiations last year, is the transformation of the North Korean banking system. The question arises whether Korea could profit from the German experience where banking transformation was one of the rather few success stories in unification. In 1990 the East German banking transformation was achieved relatively fast and uncomplicated due to considerable direct investments of the West German banks compounded with state guarantees for bad loans resulting from the credit business with existing GDR-corporations. Unfortunately, South Korea currently lacks some major prerequesites that contributed to the German banking unification, among them – and probably the most important one – is the lack of a sound and efficient banking
system that could become active in the North. Consequently, depending on the circumstances of a future Korean unification either a more gradual process is recommended or, if inner-Korean migration requires a more dynamic transition, considerable investment by foreign banks and assistance from international organisations is recommended.
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FDI and Corporate Tax Revenue: Tax Harmonization or Competition?
Reint E. Gropp, Kristina Kostial
Finance & Development,
Nr. 2,
2001
Abstract
OECD countries with high corporate tax rates have experienced both high net outflows of foreign direct investment and a decline in corporate tax revenue. Identification of a causal link between these two trends has implications for the debate on tax harmonization versus tax competition.
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Development Problems and Policies at the German Border with Poland – Regional Aspects of Trade and Investment
Franz Barjak, Gerhard Heimpold
Borders, Regions and People. European Research in Regional Science, Vol. 10. Pion.,
2000
Abstract
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Development Problems and Policies at the German Border with Poland – Regional Aspects of Trade and Investment
Franz Barjak, Gerhard Heimpold
IWH Discussion Papers,
Nr. 101,
1999
Abstract
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Institutional Limitations of Equity Markets in Transformation Economies
Thomas Linne
Forschungsreihe,
Nr. 8,
1997
Abstract
Mittlerweile verfügen alle mittel- und osteuropäischen Länder über institutionelle Märkte für den Handel mit Wertpapieren. Die Erfahrungen in diesen Ländern haben gezeigt, daß sich Aktienmärkte relativ schnell organisieren lassen - ohne bereits ein ausgefeiltes institutionelles Regelwerk implementiert zu haben. Dabei weisen die Aktienmärkte einige Hemmnisse auf, die funktionierenden Kapitalmärkten und einer erfolgreichen realwirtschaftlichen Transformation weiterhin im Wege stehen. Dazu gehören insbesondere der Mangel an Liquidität, die Interessenverflechtung zwischen Banken und Investmentfonds sowie die unzureichende Unternehmenskontrolle durch die Aktienmärkte. Die Aktienmärkte in Mittel- und Osteuropa sind als Märkte für Beteiligungsfinanzierung für die Unternehmen noch keine echte Alternative zur Fremdfinanzierung durch die Banken. Die Beschränkungen der Aktienmärkte können als eine Form der Marktsegmentierung interpretiert werden. Dies schafft Anreize für Unternehmen, den negativen Folgeerscheinungen der institutionellen Hemmnisse durch Inanspruchnahme anderer Kapitalmärkte, beispielsweise durch eine Börsennotierung an einem anderen Börsenplatz, auszuweichen. Die Liberalisierung der mittel- und osteuropäischen Kapitalmärkte mit einem verbesserten Zugang für ausländische Investoren ist deshalb begrüßenswert. Diese Maßnahmen können dazu beitragen, die institutionellen Beschränkungen der Aktienmärkte zu mindern und ihre Finanzierungsfunktion zu verbessern.
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Foreign Direct Investment in Bulgaria – The Significance of the “Value of Waiting to Invest”
Thomas Meißner
Externe Publikationen,
1997
Abstract
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Bavaria in the 1990s: A European Investment Region
Ulrich Blum
Economist Intelligence Unit,
1992
Abstract
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Harmonizing Conflicting Impacts of Infrastructure Investments
Ulrich Blum
Axiomatics and Pragmatics in Conflict Analysis,
1987
Abstract
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Regional Effects of Investments in the Infrastructure
Ulrich Blum, R. Funck
Papers of the Fourth International Transport Conference 1981,
1986
Abstract
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