Arbeitspapier
Corporate Taxation and Financial Strategies Under Asymmetric Information
In this article we study the corporate tax effects on credit market equilibria. In particular, we develop a model that accounts for five pieces of evidence: i) the existence of a tax incentive to borrow, ii) the negative relationship between leverage and profitability, iii) the existence of asymmetric information in credit markets, iv) the screening activity of lenders and v) the business cycle effects on the spread between the high-yield and the investment-grade interest rates on corporate loans. Assuming the existence of two types of firms, we show that either a separating or a pooling credit market equilibrium can arise. More importantly, the equilibrium is crucially affected by corporate taxation. Given these results, we also provide a welfare analysis and discuss corporate tax policy implications.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 4772
- Klassifikation
-
Wirtschaft
Taxation, Subsidies, and Revenue: General
Asymmetric and Private Information; Mechanism Design
- Thema
-
capital structure
corporate taxation
asymmetric information
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Cohen, Francesco
Fedele, Alessandro
Panteghini, Paolo
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Cohen, Francesco
- Fedele, Alessandro
- Panteghini, Paolo
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2014
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