Taxes, Ownership and Capital Structure
Working Paper Author/Authors
Abstract
This paper studies the ownership connection between two units that share a common controlling entity. Our results generate diverse organizations, including the horizontal groups of US family firms and the hierarchical ownership of both multinationals and European groups. The driver of ownership is the optimal capital structure associated with the tax-bankruptcy trade-off. We also examine optimal mutations in response to dividend taxes, to caps on interest deductions and to ?no bailout? rules.
Published in
© Giovanna Nicodano, Luca Regis, 2015
All rights reserved. Distributed for discussion purposes only; not to be reproduced without permission.
The views expressed are those of the author(s) and do not necessarily reflect those of ECGI or its members.
For copyright queries or takedown requests, contact wp@ecgi.org.
