Arbeitspapier

Taxes and Corporate Financing Decisions – Evidence from the Belgian ACE Reform

We contribute to the empirical literature on the debt bias of corporate income taxation through a micro-econometric evaluation of the so-called ACE corporate tax reform in Belgium based on firm-level accounting data. We interpret the tax reform that came into effect in January 2006 as an economic quasi experiment. We identify its causal impact on the leverage ratio of Belgian corporations by means of a difference-in-differences (DiD) approach, using corporations from the UK as comparison group. Our results document that the ACE reform led to a systematic pattern of heterogeneous effects on the capital structure of Belgian corporations, as the estimated reduction of the leverage ratio is most pronounced for big firms. Estimation of quantile treatment effects further reveals that reform effects get monotonically larger across the distribution of firm leverage. Finally, we provide evidence of sectoral heterogeneity with significant effects observed for capital-intensive, but not for labor-intensive sectors.

ISBN
978-3-86788-610-9
Sprache
Englisch

Erschienen in
Series: Ruhr Economic Papers ; No. 533

Klassifikation
Wirtschaft
Business Taxes and Subsidies including sales and value-added (VAT)
Fiscal Policies and Behavior of Economic Agents: Firm
Taxation and Subsidies: Incidence
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Corporate Finance and Governance: Government Policy and Regulation
Thema
corporate income taxation
financial structure
debt bias
allowance for corporate equity
difference-in-differences

Ereignis
Geistige Schöpfung
(wer)
aus dem Moore, Nils
Ereignis
Veröffentlichung
(wer)
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
(wo)
Essen
(wann)
2014

DOI
doi:10.4419/86788610
Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • aus dem Moore, Nils
  • Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)

Entstanden

  • 2014

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