Book Chapter10.1016/B978-0-44-453594-8.00003-3
Do Taxes Affect Corporate Decisions? A Review
63
TL;DR: This paper reviewed tax research related to whether corporate and personal taxes affect domestic and multinational capital structure, debt maturity, payout policy, compensation policy, risk management, earnings management, leasing, pensions, R&D partnerships, tax shelters, transfer pricing, repatriation of foreign profits, and organizational form.
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Abstract: This chapter reviews tax research related to whether corporate and personal taxes affect domestic and multinational capital structure, debt maturity, payout policy, compensation policy, risk management, earnings management, leasing, pensions, R&D partnerships, tax shelters, transfer pricing, repatriation of foreign profits, and organizational form. For each topic, theory related to how taxes can affect corporate decision making and firm value is reviewed, followed by a summary of the related empirical evidence and a discussion of unresolved issues. Tax research generally supports the hypothesis that high-tax rate firms make policy choices in response to tax incentives. Many issues remain unresolved, however, including understanding whether tax effects are of first-order importance, why firms do not pursue tax benefits more aggressively, and measuring the effect of investor-level taxes on corporate actions.
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Citations
Customer-supplier relationships and corporate tax avoidance
TL;DR: In this paper, the authors investigate whether firms in close customer-supplier relationships are better able to identify and implement tax avoidance strategies via supply chains and find that both principal customers and their dependent suppliers avoid more taxes than other firms.
394
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Sharing Risk with the Government: How Taxes Affect Corporate Risk Taking
TL;DR: This paper found that risk taking is sensitive to taxes, albeit asymmetrically: the average firm reduces risk in response to a tax increase (primarily by changing its operating cycle and reducing R&D risk).
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Frontiers of macrofinancial linkages
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TL;DR: In this article, the authors present a systematic review of the rapidly expanding literature on macro-financial linkages and discuss the need for richer theoretical models, more robust empirical work and better quality data so as to advance knowledge and help guide policymakers going forward.
71
•Book
A multiperiod theory of corporate financial policy under taxation (capital structure, debt maturity)
Craig Meredith Lewis
- 01 Jan 1986
TL;DR: In this paper, the authors examine multi-period corporate financial policy in a world where the only market imperfection is taxation, and the optimal financial policy determines the firm's capital structure and debt maturity structure.
61
Asset prices and macroeconomic outcomes : a survey
Stijn Claessens,M. Ayhan Kose +1 more
TL;DR: In this article, the authors survey the literature on the linkages between asset prices and macroeconomic outcomes, focusing on three major questions: what are the basic theoretical linkages and empirical evidence supporting these linkages?
References
Dividend Policy, Growth, and the Valuation of Shares
TL;DR: In this paper, the effect of differences in dividend policy on the current price of shares in an ideal economy characterized by perfect capital markets, rational behavior, and perfect certainty is examined.
The Capital Structure Puzzle
TL;DR: The Capital Structure Puzzle as discussed by the authors is a well-known problem in finance, and it has been studied extensively in the literature, e.g., The Journal of Finance, Vol. 39, No. 3, 1983 (Jul., 1984), pp. 575-592.
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What Do We Know about Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Luigi Zingales +1 more
TL;DR: In this paper, the authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries and find that factors identified by previous studies as correlated in the cross-section with firm leverage in the United States, are similarly correlated in other countries as well.
•Posted Content
What Do We Know About Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan,Luigi Zingales,Luigi Zingales,Luigi Zingales +5 more
TL;DR: In this paper, the authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries and find that factors identified by previous studies as important in determining the cross-section of the capital structure in the U.S. affect firm leverage in other countries as well.
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The theory and practice of corporate finance: Evidence from the field
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