This article aims at analyzing the link between subsidiaries’ capital structure and taxation in Europe. First we introduce a trade-off model, which studies a MNCs’ financial strategy and shows how debt policy allows multinational groups to shift profits from low-tax to high-tax...

Tax competition has long been studied using panel models. According to this approach, each country's tax rate is assumed to depend on a weighted average of the tax rates applied in the rest of the world, where weights are exogenous. As a consequence, the estimated reaction functions of countries...

This article aims at analyzing the link between subsidiaries’ capital structure and taxation in Europe. First we introduce a trade-off model, which studies a MNCs’ financial strategy and shows how debt policy allows multinational groups to shift profits from low-tax to high-tax...