As certain as debt and taxes: Estimating the tax sensitivity of leverage from state tax changes

• 成果类型: Article
• 署名作者: Heider, Florian; Ljungqvist, Alexander
• 署名单位: European Central Bank; New York University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.01.004
• 发表日期: 2015
• 页码: 684-712
• 关键词: capital structure; taxes; Tradeoff theory; Dynamic capital structure models; Natural experiments

摘要

Using staggered corporate income tax changes across U.S. states, we show that taxes have a first-order effect on capital structure. Firms increase leverage by around 40 basis points for every percentage-point tax increase. Consistent with dynamic tradeoff theory, the effect is asymmetric: leverage does not respond to tax cuts. This is true even within-firm: tax increases that are later reversed nonetheless lead to permanent leverage increases. The treatment effects are heterogeneous and confirm the tax channel: tax sensitivity is greater among profitable and investment-grade firms which respectively have a greater marginal tax benefit and lower marginal cost of issuing debt. (C) 2015 Elsevier B.V. All rights reserved.