Bibliometric Study on Thin-Capitalization

This paper investigates the production of knowledge regarding the effects of thin-capitalization rules issuance on the capital structure of multinational companies in comparison with conventional ones. Multinational corporations are provided with tax advantages that result from their ability of borrowing (lending) money from foreign affiliates inside their business group, thus deducting interest expenses from income tax basis. This practice is know as thin-capitalization and contributes to the reduction of a nation’s tax income. Therefore, nations issue regulation for this practice in order to avoid this tax income decrease. This exploratory and bibliometric investigation has allowed for the description of how has been constructed the basis of knowledge concerning this environment. Results point to USA and Germany as the major source of studies on thin capitalization , although the research production has been found to be dispersed along many countries and, for more than 50% of the articles included in the sample, by a single author. This subject has been strongly investigated since the decade of 1990 and many diverse journals have published papers on it. However, keywords analysis shows that thin-capitalization has been used as a context for theory testing, such as capital structure theories like pecking order and tradeoff . Research methods are also diverse, but the use of experiments and the econometric approach lead as the most used methods, especially because the investigation of new legislation effects is a very recurrent research proposal on this subject.