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UMD Study Finds Connecting Uninsured Patients to Primary Care Could Reduce ER Use

May 6, 2015

Kelly Blake 301-405-9418
Hillery Tsumba 301-628-3425

Montgomery County, Md. Initiative Could Improve Health, Reduce Costs

COLLEGE PARK, Md. – An intervention to connect low-income uninsured and Medicaid patients to a reliable source of primary health care shows promise for reducing avoidable use of hospital emergency departments in Maryland. A University of Maryland School of Public Health study evaluating the results of the intervention was published this week in the May issue of the journal Health Affairs

For twenty years, use of hospital emergency departments has been on the rise in the United States, particularly among low-income patients who face barriers to accessing health care outside of hospitals, including not having an identifiable primary health care provider. Almost half of emergency room visits are considered “avoidable.” The Emergency Department-Primary Care Connect Initiative of the Primary Care Coalition, which ran from 2009 through 2011, linked low-income uninsured and Medicaid patients to safety-net health clinics. 

“Our study found that uninsured patients with chronic health issues – such as those suffering from hypertension, diabetes, asthma, COPD, congestive heart failure, depression or anxiety – relied less on the emergency department after they were linked to a local health clinic for ongoing care,” says Dr. Karoline Mortensen, assistant professor of health services administration at the University of Maryland School of Public Health and senior researcher. “Connecting patients to primary care and expanding the availability of these safety-net clinics could reduce emergency department visits and provide better continuity of care for vulnerable populations.”  

Funded by a grant from the Centers for Medicare & Medicaid Services and the Maryland Department of Health and Mental Hygiene, the initiative engaged all five of the hospitals operating in Montgomery County, Maryland at the time, and four safety-net clinics serving low-income patients. Using “patient navigators,” individuals trained to help patients find the care they need and can afford, these hospitals referred more than 10,000 low-income, uninsured and Medicaid patients who visited emergency departments to four local primary care clinics, with the goal of encouraging them to establish an ongoing relationship with the clinic and reduce their reliance on costly emergency department care. 

Two hospitals in Montgomery County who participated in the intervention continued the program after the initial grant period concluded because of the benefits they saw for patients and for reducing emergency department visits and associated costs. These hospitals are currently testing a new version of the intervention specifically deigned to link emergency department patients with behavioral health conditions to appropriate community-based services. 

While hospital administrators and health policy experts throughout the country are recognizing that access to primary care improves continuity of care for patients and reduces avoidable use of emergency departments, the implications of this project are particularly important for hospitals in Maryland, which are now operating under a unique all-payer model for hospital payments. Within this new payment structure, Maryland hospitals will have to meet ambitious spending, quality of care, and population health goals. Reducing avoidable use of emergency departments can help in reaching these goals.

The project provides promise not only for hospitals in Maryland but throughout the nation to improve health care experiences and outcomes for their patients. Shared learning systems were an integral component of the project so participants were learning from each other and sharing best practices throughout the project and that learning has now been documented and can be replicated in other communities.

“This was an incredibly rewarding project to work on,” says Barbara H. Eldridge, Manager of Quality Improvement at the Primary Care Coalition. “We created a learning system that permits us to sustain improved communication between patients and their providers, between hospital discharge planners and community based clinics, and across five hospitals operating in Montgomery County.” The initiative has proven successful in Montgomery County, Maryland and is being replicated in communities in other parts of the country. 

“Linking Uninsured Patients Treated In The Emergency Department To Primary Care Shows Some Promise In Maryland” was written by Theresa Y. Kim, Karoline Mortensen, and Barbara Eldridge and published in the journal Health Affairs

University Launches Dynamic, Interactive Information Website UMD Right Now

December 4, 2012

Crystal Brown 301-405-4618 crystalb@umd.edu

College Park, Md. – Today, the University of Maryland launched a brand-new multimedia news and information portal, UMD Right Now, which provides members of the media and the public with real-time information on the university and its extended community.

UMD Right Now replaces Newsdesk, which previously served as the university’s news hub and central resource for members of the media. The new site is aimed at reaching broader audiences and allows visitors to keep up with the latest Maryland news and events, view photos and videos and connect with the university across all of its social media platforms.

“We designed UMD Right Now to be a comprehensive, vibrant site where visitors can find new and exciting things happening at Maryland,” said Linda Martin, executive director, Web and New Media Strategies. “Through social media, video, photos and news information, we hope to engage visitors and compel the community to explore all that Maryland has to offer.”

The new website, umdrightnow.umd.edu, contains up-to-date news releases and announcements, facts and figures about the university, a searchable database of faculty and staff experts, information highlighting innovation and entrepreneurship at UMD, additional resources for news media and other campus and athletics news.

“UMD RightNow is the place to go to find out all the things happening on and around campus on any given day,” said Crystal Brown, chief communications officer. “This website brings real-time news, events and information right to your fingertips.”

For more information and contact information for the Office of University Communications, please visit umdrightnow.umd.edu.

UMD "PALS" Program to Partner with Anne Arundel County, City of Annapolis

February 4, 2016

Maggie Haslam 202-258-8946

New partnership puts university assets to work for a more sustainable Maryland

COLLEGE PARK, Md.—The University of Maryland’s Partnership for Action Learning in Sustainability Program (PALS) has announced its fourth community partnership, this time with Anne Arundel County and the City of Annapolis, Md. Set to launch in August, the yearlong collaboration will match coursework across a variety of disciplines on UMD’s College Park campus with economic, environmental and social challenges prioritized by county and city governments, as they look to improve quality of life for those who work and live in the Chesapeake Bay Region. 

"The University of Maryland's PALS program is exactly the type of innovative partnership that can help address the critical issues facing our County," said Anne Arundel County Executive Steve Schuh. "Our administration is excited to team up with students to provide data-driven solutions that will make our County the best place to live, work and start a business in Maryland."  

"This program will help the City of Annapolis leverage resources and gather information necessary to be successful when planning various initiatives including transportation, economic development and historic preservation," said Annapolis Mayor Mike Pantilides. "Along with the University of Maryland, I am thrilled to partner with the county again in an effort to help us address the current need for information that will help us complete critical projects benefiting both the city and county."

Developed by the university’s National Center for Smart Growth, PALS pairs faculty expertise with student ingenuity to tackle sustainability issues facing Maryland communities. PALS partners with one or two communities each academic year, matching customized coursework with the specific challenges described by the partner community to deliver research and recommendations on a host of sustainability challenges. Offering on-the-ground civic engagement, PALS coursework also provides a living case study for students, offering a rewarding community experience that best mirrors future professional interactions within their disciplines. 

Building on Results 

PALS initiated its first partnership with The City of Frederick, Md. in September of 2014, adding a second, smaller collaboration with College Park in January 2015 and launching its third partnership with Howard County, Md. and the Columbia Association (CA) last September, which is currently underway. Since its inception, PALS has engaged nearly 900 students, 12 campus schools and colleges, and provided over 100,000 hours of work directed towards tackling social, economic and environmental challenges throughout the state; the work done in The City of Frederick alone is worth about one million dollars in consultant costs. The partnership with Howard County and CA, which spans 33 courses, makes PALS the largest action-learning program in the country. 

“I was so impressed with the level of work,” said The City of Frederick Alderman Michael O’Connor. “If we can do ten percent, five percent, even one percent of what they brought forward, then this partnership has been worth it for The City of Frederick.”

Enhancing Quality of Life on the Bay

The new partnership with Anne Arundel County and Annapolis is the first time PALS will be partnering with both a city and county concurrently, a nod to newly elected County Executive Steve Shuh and Annapolis Mayor Mike Pantelides’ continued efforts to collaborate for stronger, more sustainable communities. The combined jurisdiction, over half a million people, is nearly double the size of PALS’ latest efforts in Howard County; the size and scope of work will allow the program to target a wide range of topics for both undergraduate and graduate school courses as well as a potential collaboration with the county’s community college. 

“We are very excited about joining forces with Anne Arundel County and Annapolis,” says Uri Avin, Director of the PALS program. “Because of the diversity of the area, which includes rural and urban settings, and the Chesapeake bay, this partnership will expand the breadth of projects from previous years and really take advantage of the whole of the university’s assets.”

Sustainable Communities remain at partnership core

The mission of PALS is to help communities improve their quality of life through the vast resources available at the university. PALS was initiated by Dr. Gerrit Jan-Knaap, director of the university’s National Center for Smart Growth, in response to two very distinct—yet interconnected—issues: a lack of “real world” experiential opportunities for students to practice classroom skills, and the contemporary struggle local governments face with dwindling budgets, overburdened staff and mounting sustainability issues. Through interdisciplinary and cross-community collaboration, the PALS program represents an integral part of the university’s land grant mission to create a more sustainable Maryland. 

“PALS offers a platform for communities and the university to work together to solve some of our state’s most pressing issues in sustainability,” said Knaap. “We are very excited to be working in Anne Arundel and Annapolis this year and I am eager to see the partnership results—both in the community and in the classroom.”

Learn more about PALS here.

UMD Announces Inaugural Presentation of the "Intersections" Series at The Phillips Collection

February 4, 2016

Graham Binder 301-405-4076

Helen Frederick’s Acts of Silence and future exhibitions explore intriguing intersections
between old and new artistic traditions

COLLEGE PARK, Md. – Beginning February 4, the University of Maryland presents its debut Intersections exhibition at The Phillips Collection. A major component of the vibrant partnership between both institutions to transform scholarship and innovation in the arts, the University of Maryland is now the primary presenter of all Intersections exhibits at the Phillips Gallery. Helen Frederick’s work titled Acts of Silence is on view through May 1, 2016 and will continue the bold series of Intersections installations that highlight contemporary art in conjunction with the museum’s permanent collection, history and architecture.

Frederick’s Acts of Silence addresses the endangerment and degradation of the environment, and aligns with American artist Morris Graves’s (1910-2001) intellectual approach to nature. Graves possessed a unique kinship with the landscape and culture of the Pacific Northwest with a dedication to finding and creating images of creatures in the night. 

Highlighted within Acts of Silence are pulp prints and paintings surrounded by projected images of the forest, light-based sculptures, and sound pieces creating an immersive, multisensory, and interactive space. They reinforce a meditative experience of art while bringing awareness of human responsibility toward the environment. Acts of Silence offers new meaning to Graves’s artistic process, revealing the subconscious and evoking psychological exploration. 

“This is the latest fruit of our blossoming partnership with the Phillips,” said University of Maryland President Wallace D. Loh. “As with this exhibition, our relationship will enrich the cultural life of the region and strengthen both of our institutions.”

“I’m thrilled that our first UMD-presented installation in the museum’s ongoing Intersections series, inaugurated in 2009, exhibits the work of Helen Frederick,” said Director Dorothy Kosinski. “Inspired by nature and social issues, Helen’s work intersects art and science, humanities and technology. The Phillips and UMD embrace this convergence of disciplines because we believe that this kind of ‘creative construction’ will reach new audiences, disrupt conventional thinking, and inspire new heights of achievement and impact.”  

The partnership with The Phillips Collection builds on the University of Maryland’s already sterling reputation for building the future of the arts—from world-class performances at The Clarice Smith Performing Arts Center to cutting-edge training in arts management at the DeVos Institute.

Helen Frederick is a Regional Representative for the College Art Association 2016 annual conference. She is also the Director of Printmaking at George Mason University and founder of Pyramid Atlantic, a contemporary arts center in Silver Spring, Maryland, dedicated to the creation and appreciation of hand papermaking, printmaking, digital arts, and the art of the book. Her work has been exhibited in more then 100 private sections and at numerous institutions including the Kreeger Museum and Women’s War Memorial Museum, Washington, DC, and Tokushima Museum of Modern Art, Japan.  


Inaugurated in 2009 and led by Senior Curator of Modern and Contemporary Art Vesela Sretenović, the Phillips’s Intersections series has invited more than 21 artists from the US and abroad to engage with the museum’s collection and architecture. The artists have created diverse projects—both aesthetically and conceptually—and employed various media, from wall-drawing, rubber-painting, and digital photography to video projection and yarn installation.

Intersections is presented by the University of Maryland. 

Additional support is provided by Phillips Collectors Forum members.

UMD Named a 2016 Best Value College by The Princeton Review

February 3, 2016

Kristen Seabolt 301-405-4621 

COLLEGE PARK, Md. – For the sixth consecutive year, the University of Maryland has been named a Best Value College by The Princeton Review.  The official 2016 list (and book), “Colleges That Pay You Back: The 200 Schools That Give You the Best Bang for Your Tuition Buck,” ranks the selected schools on a wide range of criteria - from academics and student life, to cost of attendance and financial aid. UMD was recognized by The Princeton Review for its comprehensive aid program, wide selection of merit-based scholarships, living-and-learning communities, top-notch honors program and diverse student population. 

According to The Princeton Review, "The University of Maryland, College Park offers a comprehensive aid program for students who demonstrate financial need. But it’s the university’s full suite of merit-based scholarships that make a UMD degree an exceptional value." 

“More than 100 undergraduate degrees are offered here, and the university’s location near Washington, D.C. means that top-notch research and internship opportunities are literally in your backyard," said the book’s editors. 

The Princeton Review selected the schools based on a comprehensive analysis of more than 650 colleges that weighted 40+ data points to tally ROI (return on investment) ratings for the schools. Data analyzed covered academics, cost, financial aid, graduation rates, student debt and more. The company collected that data from its 2014-15 surveys of administrators and students at the schools. It also factored in data from PayScale.com collected through April 2015 on starting and mid-career salaries of alumni of the schools.

In the book, UMD was also touted for its diverse student population.  

“UMD is an especially diverse school, and this makes people more tolerant and accepting of people from different backgrounds and cultures,” according to the book editors. A UMD student from New Jersey explained, “Coming from a very diverse area, I thought it was going to be hard to find a school that had that same representation of minority and atypical students until I found Maryland. I don’t think I have ever learned so much about different religions, cultures, orientations, or lifestyles. All of them are accepted and even celebrated at UMD.” 

The Princeton Review also ranks UMD No. 10 among undergraduate entrepreneurship programs and top 20 among green colleges. The university was also recently ranked No. 7 for in-state tuition and No. 11 for out-of-state tuition on Kiplinger’s Personal Finance's list of Best Values in Public Colleges.

The full “Colleges That Pay You Back” list and the University of Maryland's profile are available here.

UMD Scientists Turn Leaves into Batteries

February 3, 2016

Martha Heil 301-405-0876
Lee Tune 301-405-4679

COLLEGE PARK, Md. – Scientists at the University of Maryland have a new recipe for batteries: Bake a leaf and add sodium. Researchers used a carbonized oak leaf pumped full of sodium as a demonstration battery’s negative terminal, or anode, according to a paper published in the journal ACS Applied Materials Interfaces.

"Leaves are so abundant. All we had to do was pick one up off the ground here on campus," said Hongbian Li, a visiting professor in the department of materials science and engineering in UMD’s A. James Clark School of Engineering.  One of the lead authors of the paper, Li is a member of the faculty at the National Center for Nanoscience and Technology in Beijing, China.

Other studies have shown that melon skin, banana peels and peat moss can be used in this way, but a leaf needs less preparation.

The scientists are trying to make a battery using sodium where most rechargeable batteries sold today use lithium. Sodium would hold more charge, but cannot handle as many charge-and-discharge cycles as lithium can.

One of the roadblocks has been finding an anode material that is compatible with sodium, which is slightly larger than lithium. Some scientists have explored graphene, dotted with various materials to attract and retain the sodium, but these are time consuming and expensive to produce.  In this case, the researchers simply heated the leaf for an hour at 1,000 degrees C (don’t try this at home) to burn off all but the underlying carbon structure.

The lower side of the maple leaf is studded with pores for the leaf to absorb water. In this new design, the pores absorb the sodium electrolyte. At the top, the layers of carbon that made the leaf tough become sheets of nanostructured carbon to absorb the sodium that carries the charge.

"The natural shape of a leaf already matches a battery’s needs: a low surface area, which decreases defects; a lot of small structures packed closely together, which maximizes space; and internal structures of the right size and shape to be used with sodium electrolyte," said Fei Shen, a visiting student in the department of materials science and engineering and the other lead author of the paper.

"We have tried other natural materials, such as wood fiber, to make a battery," said coauthor Liangbing Hu, an UMD assistant professor of materials science and engineering and a coauthor. "A leaf is designed by nature to store energy for later use, and using leaves in this way could make large-scale storage environmentally friendly."

The next step, Hu said, is "to investigate different types of leaves to find the best thickness, structure and flexibility" for electrical energy storage.  At this time, the researchers have no plans to commercialize their research.  

The work was supported by the Department of Energy’s Energy Frontier Research Center program, as part of Nanostructures for Electrical Energy Storage. 

The article, “Carbonized-leaf Membrane with Anisotropic Surfaces for Sodium-ion Battery” was published in the journal ACS Applied Materials Interfaces, on January 4, 2016. 

UMD Researchers to Study Evolution of U.S. Military Professionalism

February 2, 2016

Sara Gavin 301-405-1733

COLLEGE PARK, Md. – The Army Research Institute has awarded the University of Maryland’s Center for Research on Military Organization (CRMO) an $810,000 grant to conduct a comprehensive study on what it means to be a military professional in the modern century. It will be the first study of its kind on the subject in more than 60 years.   

CRMO Director Meredith Kleykamp, PhDLed by CRMO Director Meredith Kleykamp, PhD, and research associate Thomas Crosbie, PhD, the study will focus mainly on high-ranking officials in all branches of the military. Researchers will investigate the standards and expectations to which military officials hold themselves accountable and whether those benchmarks have evolved over the past half-century.  

When a scandal breaks out involving a member or members of the military, Kleykamp notes, officials are quick to point to a lack of “professionalism.” 

“Given that the military sees professionalism as the solution, we would like to help them understand whether and how professionalism could or should be altered to address problems,” said Kleykamp. “What does military professionalism really mean?”

Kleykamp and Crosbie will collect data over the next three years through three avenues: creating a database of biographical details for generals and admirals across the military; conducting personal interviews with 100 sitting generals or admirals; surveying 800+ students in professional military schools, known as war colleges, preparing to enter higher military ranks. 

UMD researchers aim to update the classic 1960 study by Morris Janowitz titled The Professional Soldier that laid the foundations for the field of military sociology. The UMD research team will modernize this study utilizing innovations in data collection, interview protocol and survey development, for which they plan to consult with the Joint Program in Survey Methodology at the University of Maryland.

“It seems especially compelling to do this research now considering the way the modern military works in the new century. We’ve seen radical changes in how wars are fought and who our enemies are,” said Kleykamp. “This will create a comprehensive, on-the-ground understanding of what it means to be a military professional right now.”

Researchers anticipate their findings may also help revise professional military education and foster discussion about redefining military ethics.

About the Center for Research on Military Organization
Since its establishment in the Department of Sociology at the University of Maryland in 1995, the CRMO has been very active in carrying out research, teaching, and outreach activities. Its primary purpose is to: coordinate research on the sociology of military institutions, war, and peacekeeping and those who participate in these institutions; conduct basic and applied research on military organization, military members, veterans and their families; train the next generation of military sociologists; serve as a nucleus for communication among social scientists conducting research on the military through publication of research findings and sponsorship of scientific conferences; and serve as a resource for policy makers so that decisions can be informed by the most recent social science research.

Christine Lagarde, International Monetary Fund Managing Director to Discuss the Importance of Emerging Markets and Developing Economies

February 2, 2016

Graham Binder 301-405-4076

COLLEGE PARK, Md. – Christine Lagarde, International Monetary Fund Managing Director visits the University of Maryland this Thursday for a highly anticipated and attended conversation centered around emerging markets and developing economies. Titled, “The Rise of Emerging Markets: Forging a New Partnership for Growth,” Lagarde will key address challenges facing emerging markets today; the interlinkages between emerging and advanced economies; policy priorities necessary for robust and sustainable growth, and how the IMF can help. 


  • Christine Lagarde, International Monetary Fund Managing Director
  • Robert Orr, University of Maryland School of Public Policy Dean
  • Ambassador Susan Schwab, United States Trade Representative and UMD Professor


Thursday, February 4, 2016

  • Doors Open: 9:30 a.m. 
  • Event: 10:00 a.m.

NOTE: Security requires that all media with video or still cameras must arrive for check-in and be in place no later than 8:30 a.m. for a security sweep.

All additional media should arrive prior to the event start time of 10:00 a.m.


Samuel Riggs IV Alumni Center
Orem Hall
7801 Alumni Dr., College Park, MD. 20742


Complimentary parking will be available for media in the Stadium Garage (south wing), just across Alumni Dr. from the Clarice. 


Media will be required to show identification and credentials at the media check-in table outside of Orem Hall prior to entering the event. 


A mult-box audio feed will be available at the event.


All media should RSVP to Graham Binder at binderg@umd.edu

UMD-led Team Advances in SpaceX Hyperloop Pod Competition

February 1, 2016

Lee Tune 301-405-4679

COLLEGE PARK, Md. — A University of Maryland-led team is one of 22 student teams selected to advance in SpaceX’s Hyperloop Pod Competition. The selected teams will head to California this summer to test their design prototypes on the world’s first Hyperloop Test Track during Competition Weekend.

SpaceX’s Hyperloop Pod Competition is designed to advance the Hyperloop concept for a new form of transportation in which passenger-carrying pods travel between cities through above-ground tubes at very high speeds.  Pod speeds of up to 700 miles-per-hour could be possible because of minimal resistance created by low air pressure in the tube and by the use of pods that levitate on a cushion of air and/or magnetic propulsion. 

The 22 teams were selected during the competition’s Design Weekend held January 29-30, 2016, on the Texas A&M University campus. More than 115 student teams  from around the world presented their pod design plans and were judged on a variety of criteria including innovation and uniqueness of design, full Hyperloop system applicability and economics, level of design detail, strength of supporting analysis and tests, feasibility, and quality of documentation and presentation. 

Mentored by UMD Department of Fire Protection Research Associate Noah Ryder, the multidisciplinary team includes more than 25 students from UMD’s A. James Clark School of Engineering and College of Computer, Mathematical, and Natural Sciences, and several students from Rutgers University who are heading up the team's electronics system efforts.

Competition pod prototypes will be scaled-down versions designed to operate on SpaceX's aluminum plate and rail test track currently being built adjacent to the company’s Hawthorne, California headquarters. The UMD-led team’s proposed model will be approximately 3 feet by 11 feet and weigh about 800 pounds. If successful, the pod will be capable of safely reaching speeds of 220 miles per hour. One of the team's key design approaches is to leverage permanent magnets, which will cause the pod to levitate upon reaching 25 miles per hour. 

Design Weekend was attended by more than a thousand engineers, college and high school students, and even included a guest appearance by SpaceX and Tesla Motors Co-founder Elon Musk, who first outlined the Hyperloop concept in a white paper in 2013. 

For more information on the UMD-led team, visit rumdloop.com and follow the team on Twitter @RUMDLoop.  For more information on the SpaceX’s Hyperloop Pod Competition visit http://www.spacex.com/hyperloop.

High Corporate Taxes Incentivize Corporate Debt

January 29, 2016

Greg Muraski 301-892-0973

COLLEGE PARK, Md. – Multinational American companies with significant operations in countries with low corporate taxes take on less debt than companies that face higher taxes, according to a new study from the University of Maryland’s Robert H. Smith School of Business. The finding helps to solve an academic mystery: A link between higher corporate taxes and debt levels is predicted by economic theory, but some recent studies have either failed to find such a connection or found it to be weaker than expected.

The paper, by the Smith School finance professor Michael Faulkender and Jason Smith, of Utah State University — and accepted at the Journal of Financial Economics — provides yet more evidence that varying corporate-tax rates across countries distort economic activity.

Taking on debt can be one way for a corporation to reduce its corporate tax bill, because the interest paid to debtholders is deducted before the corporate tax is calculated. So it stands to reason that a corporation that does most of its business in the United States, with its unusually high rate of 35 percent, would take on more debt than a company whose revenues come from Ireland, where the corporate tax is 12.5 percent. But not all empirical studies have identified such a cause-and-effect relationship.

Faulkender and Smith argue that the failure to find the expected pattern occurred because other researchers have made faulty assumptions about when foreign profits are "repatriated" to the United States. If profits are brought back immediately, the companies face a total tax of 35 percent, because the U.S. Treasury demands payment equal to the difference between the foreign tax and the American tax. But many companies do not bring profits home in that way, preferring to keep the money abroad as long as possible. "You should have very little debt when the money is overseas," Faulkender says. "You should only take on the debt when you bring the money back, because that's when the income would be subject to the high tax rate."

Faulkender notes that some companies may plan on keeping the cash abroad indefinitely, waiting either for corporate tax reform in the United States or for a corporate-tax "holiday" in which it is temporarily reduced. (The last one was in 2004.)

Faulkender and Smith therefore assume that money earned abroad stays abroad, and they calculate the corporate tax rate faced by multinational corporations as a weighted average of the rates in the different countries in which the company's subsidiaries operate. They drew the information on how much each company made in each nation —it is not available in public filings —  from a proprietary survey conducted by the Bureau of Economic Analysis. The BEA survey covered the years 1994 to 2011.

Once that adjustment was made (positing that companies pay the tax rate only where the money is earned, not the American rate, too) the companies facing higher taxes indeed had more debt. For instance, a company facing an overall tax of 25 percent had, on average, a leverage ratio of 31.8 percent. In contrast, a company facing a 35 percent tax had a 33.8 leverage ratio. That's not just a statistically significant effect: It's one that's large enough that tax rates should be considered a "first order" driver of debt levels, Faulkender and Smith say.

Cause and effect could conceivably work the other way around. Firms could choose their capital structure and then seek out tax regimes that suit their structure. But Faulkender and Smith concluded that that hypothesis could not explain the entire effect identified in the paper.

Ideally, companies should take on debt for business reasons, not tax avoidance. So the study offers grist for people who argue that the American and European corporate taxes ought to be brought into line — namely, by lowering the American tax and raising tax in outliers such as Ireland.  "When there is corporate tax reform, should this phenomenon be part of the discussion?" Faulkender asks. "Yes. Will reform happen under this President, and this Congress? No."

"Taxes and Leverage at Multinational Corporations," by Michael Faulkender and Jason Smith, is forthcoming from the Journal of Financial Economics.


February 5
Study also finds Iranians retain negative and wary stance toward the U.S. Read
February 4
New partnership puts university assets to work for a more sustainable Maryland.  Read
February 4
Helen Frederick’s Acts of Silence and future exhibitions explore intriguing intersections between old and new artistic... Read
February 3
UMD recognized for its comprehensive aid program, wide selection of merit-based scholarships, living-and-learning... Read