Thin Capitalization Rules and Entrepreneurial Capital Structure Decisions

Tax planners often choose debt over equity financing. As this has led to increased corporate debt financing, many countries have introduced thin capitalization rules to secure their tax revenues. In a general capital structure model we analyze if thin capitalization rules affect dividend and financing decisions, and whether they can partially explain why corporations receive both debt and equity capital. We model the Belgian, German and Italian rules as examples. We find that the so-called Miller equilibrium and definite financing effects depend significantly on the underlying tax system. Further, our results are useful for the treasury to decide what thin capitalization type to implement.

Generalizability and Applicability of Model-Based Business Process Compliance-Checking Approaches – A State-of-the-Art Analysis and Research Roadmap

With a steady increase of regulatory requirements for business processes, automation support of compliance management is a field garnering increasing attention in Information Systems research. Several approaches have been developed to support compliance checking of process models. One major challenge for such approaches is their ability to handle different modeling techniques and compliance rules in order to enable widespread adoption and application. Applying a structured literature search strategy, we reflect and discuss compliance-checking approaches in order to provide an insight into their generalizability and evaluation. The results imply that current approaches mainly focus on special modeling techniques and/or a restricted set of types of compliance rules. Most approaches abstain from real-world evaluation which raises the question of their practical applicability. Referring to the search results, we propose a roadmap for further research in model-based business process compliance checking.