Taxes, bankruptcy costs, and capital structure in for-profit and not-for-profit hospitals

2017 ◽  
Vol 31 (1) ◽  
pp. 21-32 ◽  
Author(s):  
Sean S Huang ◽  
Jie Yang ◽  
Nathan Carroll
Keyword(s):  
Capital Structure ◽  
Income Tax ◽  
Income Taxes ◽  
Personal Income ◽  
Explanatory Variables ◽  
For Profit ◽  
Bankruptcy Costs ◽  
Not For Profit ◽  
Acute Hospitals ◽  
The Capital Structure

About 60% of the US hospitals are not-for-profit and it is not clear how traditional theories of capital structure should be adapted to understand the borrowing behavior of not-for-profit hospitals. This paper identifies important determinants of capital structure taken from theories describing for-profit firms as well as prior literature on not-for-profit hospitals. We examine the differential effects these factors have on the capital structure of for-profit and not-for-profit hospitals. Specifically, we use a difference-in-differences regression framework to study how differences in leverage between for-profit and not-for-profit hospitals change in response to key explanatory variables (i.e. tax rates and bankruptcy costs). The sample in this study includes most US short-term general acute hospitals from 2000 to 2012. We find that personal and corporate income taxes and bankruptcy costs have significant and distinct effects on the capital structure of for-profit and not-for-profit hospitals. Specifically, relative to not-for-profit hospitals: (1) higher corporate income tax encourages for-profit hospitals to increase their debt usage; (2) higher personal income tax discourages for-profit hospitals to use debt; and (3) higher expected bankruptcy costs lead for-profit hospitals to use less debt. Over the past decade, the capital structure of for-profit hospitals has been more flexible as compared to that of not-for-profit hospitals. This may suggest that not-for-profit hospitals are more constrained by external financing resources. Particularly, our analysis suggests that not-for-profit hospitals operating in states with high corporate taxes but low personal income taxes may face particular challenges of borrowing funds relative to their for-profit competitors.

Determinants of capital structure of banks: evidence from the Kingdom of Saudi Arabia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shoaib Khan ◽  
Usman Bashir ◽  
Md. Saiful Islam
Keyword(s):  
Saudi Arabia ◽  
Capital Structure ◽  
Commercial Banks ◽  
Kingdom Of Saudi Arabia ◽  
Content Type ◽  
Factors Affecting ◽  
Earnings Volatility ◽  
Explanatory Variables ◽  
Practical Implications ◽  
The Capital Structure

Purpose The purpose of this study is to investigate the most important factors that affect the capital structure of commercial banks in the Kingdom of Saudi Arabia. Design/methodology/approach This study uses annual data of 11 Saudi commercial, national banks listed on the tadawul Saudi stock exchange for the period 2010–2017. Data was collected from the banks financial statements, tadawul annual publications and Saudi Arabian Monetary Authority. By constructing a balanced panel, this study uses pooled ordinary least squares regression along with fixed effects and random effects to examine the relationship between the bank’s book leverage as the dependent variable and bank-specific explanatory variables that include profitability, tangibility, earnings volatility, growth opportunities and bank size, while controlling for macroeconomic conditions. Findings The findings of this study suggest that banks in Saudi Arabia are highly leveraged, endorsing the fact that the nature of banks’ business is different from non-banking firms. Earnings volatility, growth and bank size show positive and significant relations with book leverage. Profitability and tangibility are negatively related to the book leverage. Empirically, the explanatory variables profitability, earnings volatility, tangibility, growth and bank size have material effects on the capital structure decisions of Saudi commercial banks. In summary, the determinants of capital structure for Saudi banks are the same as those of non-financial firms but are distinctive in nature. Research limitations/implications An extensive study on all the banks operating in Gulf Cooperation Council (GCC) countries is suggested. Practical implications The findings have practical implications for bank managers, which will help them to identify the bank-specific factors affecting the capital structure and choose the values enhancing optimal capital structure. The results of this study can assist regulatory agencies to formulate an effective regulatory framework. Moreover, the findings lay a foundation for the development of financial sector under the umbrella of the Vision 2030 program in the Kingdom. Originality/value To the best of the authors’ knowledge, this is the first study to explore the factors affecting the capital structure choices of commercial banks operating in the Kingdom of Saudi Arabia. Moreover, the findings of the study would prove useful in detailed studies of capital structure in the GCC countries as well.

scholarly journals Taxes and Capital Structure

2015 ◽  
Vol 50 (3) ◽  
pp. 277-300 ◽  
Author(s):  
Mara Faccio ◽  
Jin Xu
Keyword(s):  
Capital Structure ◽  
Income Taxes ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Natural Experiments ◽  
Corporate Tax ◽  
Personal Taxes ◽  
Ex Post ◽  
Tax Payers

AbstractWe use nearly 500 shifts in statutory corporate and personal income tax rates as natural experiments to assess the effect of corporate and personal taxes on capital structure. We find both corporate and personal income taxes to be significant determinants of capital structure. Based on ex post observed summary statistics, across Organisation for Economic Co-Operation and Development (OECD) countries, taxes appear to be as important as other traditional variables in explaining capital structure choices. The results are stronger among corporate tax payers, dividend payers, and companies that are more likely to have an individual as the marginal investor.

Raising Revenue and Raising Hell

2010 ◽  
Vol 28 (1) ◽  
pp. 227-234
Author(s):  
Christopher Capozzola
Keyword(s):  
Supreme Court ◽  
Income Tax ◽  
Income Taxes ◽  
The State ◽  
Personal Income ◽  
Estate Tax ◽  
The People ◽  
The Supreme Court ◽  
Trust Company ◽  
Treasury Department

It was a time of greenbacks, goldbugs, and grangers; milquetoast mugwumps; single-taxers, socialists, standpatters, and the Sugar Trust. Calls for more taxes filled the air. Populist Mary Lease urged Americans to “raise less corn and more hell,” and even Andrew Carnegie piously endorsed an estate tax “by which the State marks its condemnation of the selfish millionaire's unworthy life.” All that hell-raising pushed an income tax through Congress in 1894, but a year later, the Supreme Court granted relief to Charles Pollock, a ten-share stockholder in the Farmers' Loan and Trust Company, leaving Justice Henry Brown to moan in dissent that “the decision involve[d] nothing less than the surrender of the taxing power to the moneyed class.” The Populist Party demanded that “[t]he power of government—in other words, of the people—should be expanded … to the end that oppression, injustice, and poverty shall eventually cease in the land.” By the summer of 1914, oppression, injustice, and poverty were still around, but the Constitution had a Sixteenth Amendment, and the power to collect corporate excise and personal income taxes rested in the hands of the Treasury Department. But still, with all that hell-raising, I wouldn't wanted to work there.

scholarly journals Determinants of the Firm’s Capital Structure: Evidence from Dhaka Stock Exchange

2021 ◽  
Vol 37 (2) ◽  
pp. 27-41
Author(s):  
Muhammad Shahadat Hossain Siddiquee ◽  
Abdulla Abu Saker
Keyword(s):  
Social Science ◽  
Capital Structure ◽  
Stock Exchange ◽  
Least Square ◽  
Policy Implications ◽  
Annual Data ◽  
Explanatory Variables ◽  
The Core ◽  
Growth Opportunity ◽  
The Capital Structure

The core objective of the study is to explore empirically the determinants of the capital structure measured in terms of leverage and the existence of linkages in the capital structure of the companies enlisted in the Dhaka Stock Exchange (DSE) using the recent ten years’ historical annual data from 2006 to 2015. The theoretical attributes of the capital structure have been examined using the tangibles assets, profitability, size of the company, and growth opportunity as explanatory variables. Findings from the Feasible Generalized Least Square (FGLS) reveal that tangibility, size, and growth opportunity contributes positively to the capital structure whereas profitability impacts the capital structure negatively. These findings might have serious policy implications for achieving desired capital structure for the companies enlisted in the DSE. Social Science Review, Vol. 37(2), Dec 2020 Page 27-41

The Effect of Seller Income Taxes on Acquisition Price: Evidence from Purchases of Taxable and Tax-Exempt Hospitals

2004 ◽  
Vol 26 (2) ◽  
pp. 1-21 ◽  
Author(s):  
Dan S. Dhaliwal ◽  
Merle M. Erickson ◽  
Shane Heitzman
Keyword(s):  
Income Tax ◽  
Income Taxes ◽  
For Profit ◽  
Primary Difference ◽  
Tax Exempt ◽  
Tax Status ◽  
Lock In Effect ◽  
Lock In ◽  
The Impact ◽  
Acquisition Price

This paper investigates the impact of the seller's tax liability on the price paid in hospital acquisitions. Lock-in theory predicts that for a given asset, asset holders with larger tax liabilities demand a higher price to compensate for income tax liabilities generated on the sale. We apply this theory to a sample of hospital acquisitions by for-profit firms where the primary difference among target hospitals is the seller's tax status—either taxable or tax-exempt. Consistent with the predicted lock-in effect, the evidence indicates that purchase prices are higher when the seller is taxable than when the seller is tax-exempt. Thus, our findings suggest that seller tax liabilities are positively related to purchase prices.

scholarly journals EXPLAINING THE PRICE OF VOLUNTARY CARBON OFFSETS

2010 ◽  
Vol 01 (02) ◽  
pp. 93-111 ◽  
Author(s):  
MARC N. CONTE ◽  
MATTHEW J. KOTCHEN
Keyword(s):  
Carbon Offsets ◽  
Third Party ◽  
Hedonic Price ◽  
Large Variability ◽  
Explanatory Variables ◽  
For Profit ◽  
Not For Profit ◽  
Price Functions ◽  
Developed Nations ◽  
Project Level

This paper identifies factors that explain the large variability in the price of voluntary carbon offsets. We estimate hedonic price functions using a variety of provider- and project-level characteristics as explanatory variables. We find that providers located in Europe sell offsets at prices that are approximately 30% higher than providers located in either North America or Australasia. Contrary to what one might expect, offset prices are generally higher, by roughly 20%, when projects are located in developing or least-developed nations. But this result does not hold for forestry-based projects. We find evidence that forestry-based offsets sell at lower prices, and the result is particularly strong when projects are located in developing or least-developed nations. Offsets that are certified under the Clean Development Mechanism or the Gold Standard, and therefore qualify for emission reductions under the Kyoto Protocol, sell at a premium of more than 30%; however, third-party certification from the Voluntary Carbon Standard, one of the popular certifiers, is associated with a price discount. Variables that have no effect on offset prices are the number of projects that a provider manages and a provider's status as for-profit or not-for-profit.

scholarly journals Pengaruh Perubahan Tarif Pajak Penghasilan, Struktur Modal Dan Kebijakan Dividen Terhadap Harga Saham

2021 ◽  
Vol 4 (2) ◽  
pp. 184
Author(s):  
Puji Rahayu ◽  
Ahmad Yani
Keyword(s):  
Capital Structure ◽  
Stock Prices ◽  
Income Tax ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Sampling Technique ◽  
Tax Rates ◽  
Manufacturing Companies ◽  
The Capital Structure

The purpose of this study is to analyze the effect of changes in income tax rates according to PP no. 30 of 2020, capital structure and dividend policy on stock prices in manufacturing companies in the Food and Beverage sector listed on the Indonesia Stock Exchange in 2016 –2020. This type of research uses descriptive quantitative. The population in this study were 30 companies. The sampling technique in this study was purposive sampling, so that a sample of 15 data from 3 companies was obtained for 5 years. Methods of data analysis using multiple linear regression analysis with the help of SPSS application. The results of the partial analysis show that the tax rate and dividend policy have no effect on stock prices. While the capital structure has a positive influence on stock prices. However, simultaneously stock prices are affected by changes in income tax rates, capital structure, and dividend policy. Based on the results of the study, it can be concluded that the high and low tax rates are not able to affect stock prices. the higher the capital structure will be followed by an increase in stock prices. While the dividend policy can not affect changes in stock prices.

DECOMPOSITION OF SOCIAL INCOME ADJUSTMENT EFFECT OF CHINA’S PERSONAL INCOME TAX AND SELECTION AMONG DIFFERENT UNIFORM INCOME TAX MODES

2018 ◽  
Vol 63 (04) ◽  
pp. 917-941
Author(s):  
HU HUA
Keyword(s):  
Income Tax ◽  
Linear Models ◽  
Income Taxes ◽  
Personal Income ◽  
Chinese Family ◽  
Tax Burden ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Income Gap ◽  
Business Income

Based on 10342 Chinese family samples, by means of non-linear models, the effects of wage income tax (WIT), individual business income tax (IBIT) and other income tax (OIT) on the income gap in China are analyzed. It is found that China’s classified income tax is helpful to narrow the income gap. WIT plays a very important role in narrowing the income gap, with IBIT and OIT widening the income gap. Such income taxes, especially WIT, cause differences of the tax burden between taxpayers who have the same income amount. Uniform income tax is an indispensable measure to solve the problems. On the basis of the income tax systems of 13 countries, 16 different kinds of personal or household uniform income tax modes were built up. Namibia’s household uniform income tax mode is practical to China, because the income adjustment effect of such mode is stronger than that of China’s classified income tax, but the average tax rate of it is lower than that of China’s classified income tax.

scholarly journals Capital Structure Determinants of S&P BSE 500: A Panel Data Research

2019 ◽  
Vol 8 (2S7) ◽  
pp. 377-380 ◽  
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Regression Model ◽  
Firm Size ◽  
Explanatory Variables ◽  
Industrial Sectors ◽  
The Capital Structure

The paper identifies the most important factors specific to companies which impacts on the capital structure of 416 companies belonging to 14 industrial sectors listed in S&P BSE 500 for a duration of 19 years which is from 2000 to 2018. Multi regression model is used to understand the influence of select variables on capital structure. The study finds that 4 explanatory variables like firm size, tax paid, depreciation to total assets ratio and profitability ratio are statistically significant capital structure determinants

Sign in / Sign up

Export Citation Format

Share Document