Taxes And Capital Structure: A Study Of European Companies
AbstractWe analyse the impact of tax policy on firms' leverage ratios in a balanced panel of 129 medium-sized listed European companies from 1993 to 2005. A general model of company leverage is applied within which King's tax ratios are used to capture tax policy changes, controlling for non-tax influences. Leverage measures studied include total, long-term and short-term debt. A generalized method of moments estimator is used to control for endogeneity. The results suggest that tax policy has a significant but small impact on firms' debt ratios and that non-debt tax shields are a substitute for debt in company activities. Copyright � 2008 The Authors. Journal compilation � 2008 Blackwell Publishing Ltd and The University of Manchester.
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Bibliographic InfoArticle provided by University of Manchester in its journal Manchester School.
Volume (Year): 76 (2008)
Issue (Month): S1 (09)
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Postal: Manchester M13 9PL
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1463-6786
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- Feld, Lars P. & Heckemeyer, Jost H. & Overesch, Michael, 2011.
"Capital structure choice and company taxation: A meta-study,"
ZEW Discussion Papers
11-075, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Feld, Lars P. & Heckemeyer, Jost H. & Overesch, Michael, 2013. "Capital structure choice and company taxation: A meta-study," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2850-2866.
- Lars P. Feld & Jost Henrich Heckemeyer & Michael Overesch, 2011. "Capital Structure Choice and Company Taxation: A Meta-Study," CESifo Working Paper Series 3400, CESifo Group Munich.
- Miles, David & Yang, Jing & Marcheggiano, Gilberto, 2011.
"Optimal Bank Capital,"
31, Monetary Policy Committee Unit, Bank of England.
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