How does the Corporate Tax Rate Affect Firm Capital Structure?

No Thumbnail Available

Files

URL

Journal Title

Journal ISSN

Volume Title

School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.

Authors

Date

2024

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

25

Series

Abstract

This thesis provides evidence on the effect of changes in the corporate tax rate on short and long-term debt to assets ratios of listed European firms. Consistent with previous literature on US firms, such as Gordon and Lee (2001) and Graham (1996), it can be shown that there is a statistically significant, albeit minor, positive correlation between the corporate tax rate a firm faces and the amount of short-term debt that company holds on its balance sheet. Contradictory to previous literature, this effect is not observed for long-term or total debt to assets. The effect of the CTR on debt to assets is significantly stronger for companies in smaller economies.

Tämä opinnäytetyö tutkii yhteisöveroasteen muutoksien vaikutuksia pitkän ja lyhyen velan määrään eurooppalaisten julkisten yritysten taseissa. Johdonmukaisesti aiemman kirjallisuuden, kuten Gordon ja Lee (2001) ja Graham (1996) kanssa, voidaan todistaa, että yhteisöveroasteella on tilastollisesti merkittävä, joskin matala korrelaatio yritysten lyhyen velan määrän kanssa. Ristiriidassa aiemman kirjallisuuden kanssa, tätä vaikutusta ei havaita pitkälle velalle.Yhteisöveroasteen vaikutus on huomattavasti voimakkaampi pienissä talouksissa.

Description

Thesis advisor

Conlin, Andrew

Keywords

capital structure, debt, taxes, equity

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202501261763

Collections

[kand] Kauppakorkeakoulu / BIZ