Capital structure choice and company taxation: A meta-study

Arbeitspapier

This paper provides a quantitative review of the empirical literature on the tax impact on corporate debt financing. Synthesizing the evidence from 46 previous studies, we find that this impact is substantial. In particular, the tax rate proxy determines the outcome of primary analyses. Measures like the simulated marginal tax rate (Graham (1996a)) avoid a downward bias in estimates for the debt response to tax. Moreover, debt characteristics, econometric specifications, and the set of control-variables affect tax effects. Accounting for misspecification biases by means of meta-regressions, we predict a marginal tax effect on the debt ratio of 0.3.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 11-075

Classification and Topics

• Classification: Wirtschaft ; Corporate Finance and Governance: General ; Fiscal Policies and Behavior of Economic Agents: Firm ; Multinational Firms; International Business
• Subject: capital structure ; corporate income tax ; meta-analysis ; Körperschaftsteuer ; Steuerwirkung ; Kapitalstruktur ; Fremdkapital ; Meta-Analyse ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Feld, Lars P. ; Heckemeyer, Jost H. ; Overesch, Michael
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/54979
• Last update: 10.03.2025, 11:45 AM CET