@techreport{Hartmann-Wendels2012incentives,
abstract = {This paper provides new evidence that taxes affect capital structure choice, using a unique and comprehensive panel data set which covers 86,173 German non-financial firms over the years 1973-2008. Following the Graham methodology to simulate marginal tax rates, we find a statistically and economically significant positive relationship between the marginal tax benefit of debt (net and gross of investor taxes) and the debt ratio. A 10% increase in the net (gross) marginal tax benefit of debt causes a 1.5% (1.6%) increase in the debt ratio, ceteris paribus. The results are robust to various specifications like using changes in debt or debt to capital ratios. A significantly positive effect of taxes on the debt ratio can also be identified in a partial adjustment model.},
address = {Frankfurt, M.},
author = {Thomas Hartmann-Wendels and Ingrid Stein and Alwin St\"{o}ter},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
isbn = {978-3-86558-830-2},
keywords = {G32; H20; 330; debt; capital structure; marginal tax rate; corporate taxes; personal taxes},
language = {eng},
number = {18/2012},
publisher = {Dt. Bundesbank},
title = {Tax incentives and capital structure choice: Evidence from Germany},
type = {Discussion Paper, Deutsche Bundesbank},
url = {http://hdl.handle.net/10419/64815},
year = {2012}
}
