We construct a novel panel of insider ownership for roughly 600 U.S. bank holding companies from 2003 to 2014 to test whether ownership structure shaped recapitalizations around the Global Financial Crisis (GFC). Insider ownership shows no discrete shift around the GFC. Using a difference-in-differences design with BHC and time fixed effects, we find that, after Q3 2008, banks with higher pre-crisis insider stakes issued significantly less common equity than otherwise similar peers. This effect is more pronounced where insiders enjoy greater private benefits of control, as proxied by insider lending and earnings opacity—consistent with dilution reluctance as the mechanism. The findings hold in propensity score matched regressions and when employing instrumental variables for insider ownership. These results reveal that ownership structure affects banks’ equity issuances in crises, underscoring the importance of accounting for ownership structure in bank stress tests and capital-regulation frameworks.

We provide estimates of profit shifting for over 2 million firm-year observations in 100 countries over the period 2009–2020. Employing nonparametric estimation techniques within a mainstay model of profit shifting, we examine how the profits of both parent and subsidiary firms within a multinational group respond to marginal changes in the composite tax indicator. The key advantage of this approach is that it yields firm-year estimates of profit shifting. Multinational firms engage in extensive profit shifting by maintaining affiliates in low-tax countries and zero-tax havens. Multinational groups with an ultimate tax-haven owner exhibit the largest profit response to tax incentives. Our new database opens important avenues for analyzing the sources and effects of profit shifting.

We show that in a canonical model with heterogeneous entrepreneurs, financial frictions, and an imperfectly elastic supply of capital, a fall in the interest rate has an ambiguous effect on aggregate economic activity. In partial equilibrium, a lower interest rate raises aggregate investment both by relaxing financial constraints and by prompting relatively less productive entrepreneurs to invest. In general equilibrium, however, this higher demand for capital raises its price and crowds out investment by more productive entrepreneurs. When this reallocation is strong enough, a fall in the interest rate reduces aggregate output. A numerical exploration of the model suggests that this reallocation effect is quantitatively significant and—in response to persistent changes in the interest rate—stronger than the traditional balance-sheet channel. We provide evidence of the reallocation effect using U.S. firm-level data.