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Title:Capital structure choice and company taxation: A meta-study PDF Logo
Authors:Feld, Lars P.
Heckemeyer, Jost H.
Overesch, Michael
Issue Date:2011
Series/Report no.:ZEW Discussion Papers 11-075
Abstract:This paper provides a quantitative review of the empirical literature on the tax impact on corporate debt financing. Synthesizing the evidence from 46 previous studies, we find that this impact is substantial. In particular, the tax rate proxy determines the outcome of primary analyses. Measures like the simulated marginal tax rate (Graham (1996a)) avoid a downward bias in estimates for the debt response to tax. Moreover, debt characteristics, econometric specifications, and the set of control-variables affect tax effects. Accounting for misspecification biases by means of meta-regressions, we predict a marginal tax effect on the debt ratio of 0.3.
Subjects:capital structure
corporate income tax
meta-analysis
JEL:G30
H32
F23
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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