Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China
In this paper, we investigate whether listed firms in China adjust their capital structure in response to an increase in the corporate taxrate. Although theories of capital structure suggest that corporate tax is an important determinant of capital structure, how exogenouschanges of the tax rate aff...
Saved in:
Main Authors: | , |
---|---|
Format: | text |
Language: | English |
Published: |
Institutional Knowledge at Singapore Management University
2009
|
Subjects: | |
Online Access: | https://ink.library.smu.edu.sg/soa_research/1670 https://ink.library.smu.edu.sg/context/soa_research/article/2697/viewcontent/corporate_tax.pdf |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
Institution: | Singapore Management University |
Language: | English |
id |
sg-smu-ink.soa_research-2697 |
---|---|
record_format |
dspace |
spelling |
sg-smu-ink.soa_research-26972018-02-08T02:24:22Z Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China WU, Liansheng YUE, Heng In this paper, we investigate whether listed firms in China adjust their capital structure in response to an increase in the corporate taxrate. Although theories of capital structure suggest that corporate tax is an important determinant of capital structure, how exogenouschanges of the tax rate affect firms’ leverage decisions has not been fully explored. We examine a unique circumstance in which the Chinesegovernment increased the corporate tax rate of firms that had previously received local government tax rebates. The evidence indicatesthat these firms increased their leverage when the corporate tax rate increased. Further investigation suggests that the adjustment ofleverage was mostly driven by firms with a high level of access to bank loans. 2009-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1670 info:doi/10.1016/j.jbankfin.2006.10.030 https://ink.library.smu.edu.sg/context/soa_research/article/2697/viewcontent/corporate_tax.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Capital structure Tax Bank loans China Asian Studies Taxation |
institution |
Singapore Management University |
building |
SMU Libraries |
continent |
Asia |
country |
Singapore Singapore |
content_provider |
SMU Libraries |
collection |
InK@SMU |
language |
English |
topic |
Capital structure Tax Bank loans China Asian Studies Taxation |
spellingShingle |
Capital structure Tax Bank loans China Asian Studies Taxation WU, Liansheng YUE, Heng Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China |
description |
In this paper, we investigate whether listed firms in China adjust their capital structure in response to an increase in the corporate taxrate. Although theories of capital structure suggest that corporate tax is an important determinant of capital structure, how exogenouschanges of the tax rate affect firms’ leverage decisions has not been fully explored. We examine a unique circumstance in which the Chinesegovernment increased the corporate tax rate of firms that had previously received local government tax rebates. The evidence indicatesthat these firms increased their leverage when the corporate tax rate increased. Further investigation suggests that the adjustment ofleverage was mostly driven by firms with a high level of access to bank loans. |
format |
text |
author |
WU, Liansheng YUE, Heng |
author_facet |
WU, Liansheng YUE, Heng |
author_sort |
WU, Liansheng |
title |
Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China |
title_short |
Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China |
title_full |
Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China |
title_fullStr |
Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China |
title_full_unstemmed |
Corporate tax, capital structure, and the accessibility of bank loans: Evidence from China |
title_sort |
corporate tax, capital structure, and the accessibility of bank loans: evidence from china |
publisher |
Institutional Knowledge at Singapore Management University |
publishDate |
2009 |
url |
https://ink.library.smu.edu.sg/soa_research/1670 https://ink.library.smu.edu.sg/context/soa_research/article/2697/viewcontent/corporate_tax.pdf |
_version_ |
1770574000925179904 |