2015/06/01 by Mara Faccio, Jin Xu · 204 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Business #Capital (architecture) #Capital structure #Corporate Finance and Governance #Corporate Taxation and Avoidance #Dividend #Dividend tax #Economic Policies and Impacts #Economics #Finance #Gross income #Labour economics #Macroeconomics #Monetary economics #Personal income #Public economics #State income tax #Statutory law #Tax reform
paper · doi:10.1017/s0022109015000174
published in Journal of Financial and Quantitative Analysis 50(3), 277-300 (Cambridge University Press)
openalex publication_date 2015/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Abstract We use nearly 500 shifts in statutory corporate and personal income tax rates as natural experiments to assess the effect of corporate and personal taxes on capital structure. We find both corporate and personal income taxes to be significant determinants of capital structure. Based on ex post observed summary statistics, across Organisation for Economic Co-Operation and Development (OECD) countries, taxes appear to be as important as other traditional variables in explaining capital structure choices. The results are stronger among corporate tax payers, dividend payers, and companies that are more likely to have an individual as the marginal investor.