Tax incidence in loan pricing

• 成果类型: Article
• 署名作者: Kang, Ya; Li, Oliver Zhen; Lin, Yupeng
• 署名单位: Chinese University of Hong Kong; Shanghai Lixin University of Accounting & Finance; National University of Singapore
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2021.101418
• 发表日期: 2021
• 关键词: Relationship banking; corporate-taxes; policy choices; income-tax; debt; INVESTMENT; cost; performance; benefits; taxation

摘要

We investigate tax incidence reflected in the pricing of syndicated loans and argue that loan spread increases in bank income taxes of borrowers' home states. We compare bor-rowers in states with differing bank tax rates and demonstrate the presence of tax inci-dence on borrowers with causality coming from bank taxes. Tax incidence on borrowers increases with local loan market concentration and pre-existing lending relationships. Further, a lack of tax deductibility of loan loss provisions enhances tax incidence. We conclude that bank income taxation, though specifically targeted at banks, is partially passed through to borrowers and increases their cost of debt. (c) 2021 Elsevier B.V. All rights reserved.