Do Foreign Multinationals' Tax Incentives Influence Their U.S. Income Reporting and Debt Policy?

Mills, Lillian F.; Newberry, Kaye J.

doi:10.17310/ntj.2004.1.05

Cited by 111 publications

(86 citation statements)

References 22 publications

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“…Hipóteses formuladas a partir da teoria do tradeoff foram testadas e confirmadas por estudos anteriores realizados em outros países (AYRES et al, 2001;HOUSTON, 1999;BURGMAN, 1996;CALEGARI, 2000;CLOYD et al, 1997;ELY et al, 2002;GROPP, 2002;GUENTHER, 1996;HARWOOD;MANZON, 2000;MILLS;NEWBERRY, 2004;MOHAMAD, 1995;MYERS, 2001;PILOTTE, 1990;SHIH, 1996;SMITH, 1997). Esses autores encontraram resultados preconizados pela teoria do tradeoff, que indicam uma relação positiva entre o nível de endividamento e o fator tributação do lucro.…”

Section: Introductionunclassified

Relação entre a tributação do lucro e a estrutura de capital das grandes empresas no Brasil

Pohlmann

Iudícibus

2010

Rev. contab. finanç.

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RESUMOO presente trabalho é uma pesquisa teórico-empírica que utiliza a análise de regressão linear múltipla com o objetivo de testar a validade de hipóteses relacionadas à influência da tributação do lucro na estrutura de capital das grandes empresas no Brasil. Segundo a teoria do tradeoff, a empresa, incentivada pela vantagem fiscal do endividamento, recorre a capitais de terceiros até o nível em que os custos associados aos riscos de falência superam essa vantagem. A teoria do pecking order, por sua vez, preconiza uma hierarquização das fontes de financiamento e não atribui à tributação do lucro papel relevante na explicação do endividamento. Duas hipóteses foram postas à prova: a primeira testou a validade da teoria do tradeoff quanto à existência de impacto da tributação do lucro no endividamento. A testou a presença dessa relação nas firmas com alto endividamento e baixo nível de tributação, para as quais não haveria a vantagem fiscal do endividamento. A pesquisa tomou por base valores médios dos dados de 2001 a 2003 das 500 maiores empresas estabelecidas no Brasil, segundo a Revista Exame. A hipótese central da pesquisa restou confirmada: existe uma relação positiva entre o nível de tributação do lucro e o grau de endividamento. Essa relação foi verificada, também, para as empresas com alto endividamento e baixo nível de tributação do lucro. Esses achados confirmaram o maior poder preditivo da teoria do tradeoff em detrimento da teoria do pecking order quanto ao impacto da tributação do lucro sobre a decisão de endividamento. Palavras

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Section: Introductionunclassified

Relação entre a tributação do lucro e a estrutura de capital das grandes empresas no Brasil

Pohlmann

Iudícibus

2010

Rev. contab. finanç.

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“…Mills and Newberry (2005) exploit confidential tax return data to show that firms often report higher interest expense on their tax return than in their financial statements. This difference is at least partially explained by the use of nonconforming financing methods such as R&D limited partnerships, synthetic leases, and securitizations.…”

mentioning

confidence: 99%

A review of tax research

Hanlon¹,

Heitzman²

2010

Journal of Accounting and Economics

2,127

646

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Abstract:In this paper, we present a review of tax research. We survey four main areas of the literature: 1) the informational role of income tax expense reported for financial accounting, 2) corporate tax avoidance, 3) corporate decision-making including investment, capital structure, and organizational form, and 4) taxes and asset pricing. We summarize the research areas and questions examined to date and what we have learned or not learned from the work completed thus far. In addition, we provide our opinion as to the interesting and important issues for future research. ______________________This paper was prepared for the 2009 Journal of Accounting and Economics Conference. We appreciate comments from Scott Dyreng, Mihir Desai (discussant), S.P. Kothari (editor), John Long, Ed Maydew, Lillian Mills, Tom Omer, Sonja Rego, Doug Shackelford, Terry Shevlin, Joel Slemrod, Cliff Smith, David Weber, Ryan Wilson, Jerry Zimmerman, George Zodrow, and conference participants at the JAE Conference as well as at the 2009 University of North Carolina Tax Symposium and the discussant there, Bill Gentry. All errors and omissions are our own. * Corresponding author: 100 Main Street, Cambridge, MA. email: mhanlon@mit.edu. 1 A Review of Tax Research IntroductionIn this paper, we review tax research in accounting as well as tax research in economics and finance to the extent that it is related to or is affected by research in accounting. Shackelford and Shevlin (2001) provide a careful and thorough review of empirical tax research in accounting in the prior Journal of Accounting and Economics review volume. Shackelford and Shevlin limit their review to research published in accounting outlets and describe the development of the relatively young archival, microeconomic-based income tax literature that arose from the Scholes andWolfson framework. In his discussion of the review, Maydew (2001) emphasizes the need for tax researchers in accounting to think more broadly and to incorporate more theory and evidence from economics and finance. We agree. Tax research has a long history in many disciplines; this fact cannot be ignored. Our goal in this paper is to integrate the theoretical and empirical tax research from accounting, economics, and finance, to summarize what is known and unknown, and to offer suggestions for future research.The multidisciplinary nature of tax research is what makes tax research exciting (yes, exciting), yet difficult. Tax research can be difficult not only because one has to follow tax studies in accounting, finance, economics, and law (through academic institutions, governmental agencies, and policy think tanks), but also because different disciplines often use different languages and have different perspectives. 1 For example, economists generally focus on tax compliance, tax incidence (such as who bears the corporate tax), investment and economic growth effects (such as how taxes 1 Slemrod (1992a) characterizes these differences as economists studying what corporations actually do and accountants stud...

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“…Desai, Foley, and Hines (2004) find that both the internal and external financing of outward U.S. Foreign Direct Investment (FDI) is sensitive to foreign tax rates. Mills and Newberry (2004) analogously find that non-U.S. multinationals from countries with relatively low tax rates use relatively intensive debt finance of their foreign-controlled corporations in the United States.…”

Section: Introductionmentioning

confidence: 70%

Capital Structure and International Debt Shifting

Laeven

Huizinga²,

Nicodème³

2007

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.This paper presents a model of a multinational firm's optimal debt policy that incorporates international taxation factors. The model yields the prediction that a multinational firm's indebtedness in a country depends on a weighted average of national tax rates and differences between national and foreign tax rates. These differences matter because multinationals have an incentive to shift debt to high-tax countries. The predictions of the model are tested using a novel firm-level dataset for European multinationals and their subsidiaries, combined with newly collected data on the international tax treatment of dividend and interest streams. Our empirical results show that corporate debt policy indeed not only reflects domestic corporate tax rates but also differences in international tax systems. These findings contribute to our understanding of how corporate debt policy is set in an international context. JEL Classification Numbers: F23, G32, H25

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Do Foreign Multinationals' Tax Incentives Influence Their U.S. Income Reporting and Debt Policy?

Cited by 111 publications

References 22 publications

Relação entre a tributação do lucro e a estrutura de capital das grandes empresas no Brasil

Relação entre a tributação do lucro e a estrutura de capital das grandes empresas no Brasil

A review of tax research

Capital Structure and International Debt Shifting

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