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Partner leasing in Sweden : a case study in financial innovation and re-regulation

Author

Listed:
  • Ken Angelin

    (Stockholm School of Economics)

  • L. Peter Jennergren

    (Stockholm School of Economics)

Abstract

Partner leasing is a form of financial leasing which is driven primarily by tax considerations. We discuss how partner leasing flourished in Sweden as a financial innovation in response to particular tax rules around 1983, and how the authorities attempted to eliminate it. Specific reference is made to the Tjädern case, an authentic and sophisticated piece of financial engineering. The lowering of the corporate income tax rate through the 1991 tax reform and the subsequent fall in interest rates seem to have made partner leasing relatively uninteresting today as a corporate tax planning device.

Suggested Citation

  • Ken Angelin & L. Peter Jennergren, 1998. "Partner leasing in Sweden : a case study in financial innovation and re-regulation," Finnish Economic Papers, Finnish Economic Association, vol. 11(1), pages 3-18, Spring.
    • Handle: RePEc:fep:journl:v:11:y:1998:i:1:p:3-18
    as

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    References listed on IDEAS

    as
    1. Franks, Julian R & Hodges, Stewart D, 1978. "Valuation of Financial Lease Contracts: A Note," Journal of Finance, American Finance Association, vol. 33(2), pages 657-669, May.
    2. Levy, Haim & Sarnat, Marchall, 1979. "On Leasing, Borrowing and Financial Risk," University of California at Los Angeles, Anderson Graduate School of Management qt5mr7g75s, Anderson Graduate School of Management, UCLA.
    3. Miller, Merton H., 1986. "Financial Innovation: The Last Twenty Years and the Next," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 21(4), pages 459-471, December.
    4. Kane, Edward J, 1981. "Accelerating Inflation, Technological Innovation, and the Decreasing Effectiveness of Banking Regulation," Journal of Finance, American Finance Association, vol. 36(2), pages 355-367, May.
    5. Robert C. Merton, 1992. "Financial Innovation And Economic Performance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 4(4), pages 12-22, January.
    6. Myers, Stewart C & Dill, David A & Bautista, Alberto J, 1976. "Valuation of Financial Lease Contracts," Journal of Finance, American Finance Association, vol. 31(3), pages 799-819, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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