Taxes and leverage at multinational corporations

• 成果类型: Article
• 署名作者: Faulkender, Michael; Smith, Jason M.
• 署名单位: University System of Maryland; University of Maryland College Park; Utah System of Higher Education; Utah State University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.05.011
• 发表日期: 2016
• 页码: 1-20
• 关键词: capital structure; taxes; leverage

摘要

Empirical research has struggled to show that variation in corporate capital structure arises from variation in estimated corporate income tax rates. We argue that, in previdus studies, both the tax rates applied to multinational corporations and the taxable income earned have been mismeasured. Using the Bureau of Economic Analysis annual survey sample combined with each firm's income and country specific tax rate, we find that firms do have higher leverage ratios and lower interest coverage ratios when they operate in countries with higher tax rates, as theory would suggest. The trade-off theory of capital structure continues to have empirical support. (C) 2016 Published by Elsevier B.V.