Creditor Rights and Debt Allocation within Multinationals

Arbeitspapier

We analyze the optimal debt structure of multinational corporations choosing between centralized or decentralized borrowing. We identify how this choice is affected by creditor rights and bankruptcy costs, taking into account managerial incentives and coinsurance considerations. We find that partially centralized borrowing structures are optimal with either weak or strong creditor rights. For intermediate levels of creditor rights fully decentralized (centralized) borrowing structures are optimal if managers have strong (weak) empire building dencies. Decentralized borrowing is more attractive for companies focussing on short-term profitability. Credits are rather taken in countries with better creditor rights and more efficient insolvency systems.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 304

Classification and Topics

• Classification: Wirtschaft ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Multinational Firms; International Business
• Subject: Multinational corporations ; capital structure ; creditor rights ; coinsurance ; internal capital markets ; Multinationales Unternehmen ; Kapitalstruktur ; Schulden ; Gläubigerschutz ; Kapitalmarktrecht ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Akbel, Basak ; Schnitzer, Monika
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2009

Further information

• DOI: doi:10.5282/ubm/epub.13250
• Handle: http://hdl.handle.net/10419/94143
• URN: urn:nbn:de:bvb:19-epub-13250-8
• Last update: 10.03.2025, 11:41 AM CET