scholarly journals Corporate Taxation and Capital Structure: Evidence from Russia

2017 ◽  
Vol 11 (2) ◽  
pp. 7-14
Author(s):  
Evgeny Ilyukhin
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Corporate Taxation ◽  
Tax Rates ◽  
Financial Leverage ◽  
Effective Tax Rates ◽  
Empirical Results

The study aims to empirically analyze whether corporate taxation has an impact on firm capital structure decisions. The results, based on panel data on Russian private (non-listed), non-financial and non-state owned firms, show that taxation has a significant impact on firm financial leverage (negative in terms of long-term debt and positive in terms of equity). The smallest and largest firms of the sample respond more dramatically to effective tax rates. The results are robust according to the applied tests. Moreover, additional empirical results are obtained for the standard capital structure determinants (size, profitability, tangibility and liquidity of assets), which contribute to capital structure theories.

scholarly journals Influence of Corporate Taxation on the Financial Leverage of Czech, Polish and Russian Companies

2019 ◽  
Vol 13 (3) ◽  
pp. 61-70
Author(s):  
Irena Jindrichovska ◽  
Vyacheslav Moskalchuk
Keyword(s):  
Capital Structure ◽  
Eastern Europe ◽  
Research Area ◽  
Subject Area ◽  
Corporate Taxation ◽  
Financial Leverage ◽  
Short Term ◽  
Coverage Ratio ◽  
The Capital Structure

This article aims to compare and contrast the available empirical evidence concerning the capital structure of Polish,Czech and Russian companies. This is an intriguing research area due to the fact that the Czech and Polish economiesbegan their transition to the market economy contemporaneously with Russia, and so along with other cultural andhistorical parallels, the data is comparable.We compare data from a selection of large companies from the selected territories and investigate whether effective taxrate is significant determinant of capital structure. The selected sample is comprised of 69 companies (50 from Russia, 9from Poland, and 10 from Czech Republic), using data over a period of fourteen years. We perform a regression analysisand interpret the results using theoretical knowledge as articulated in the academic literature. The dependent variablein all tested regressions is financial leverage, calculated as the ratio of the sum of short-term and long-term debts to thesum of short-term and long-term assets. Other variables evaluated include interest coverage ratio, the level of companytangibility, and the cost of debt. This set of input values was uploaded from the Bloomberg database.Our results indicate that taxation does have determining effect on the choice of a certain level of leverage. Moreover,the effective tax rate represents the most important factor in determining the model of capital structure utilised by largecompanies in each country studied. We establish the dependence of capital structure models on the level of corporate taxapplied in each country and identify a set of additional determinants which play a significant role.This paper’s novelty may be summarised as representing an advanced understanding of specific aspects of influence ofthe corporate taxation on the capital structure of companies in Russia and other economies of the former Eastern Bloc.This paper shines a new light on the subject area by extending the duration of the studied data beyond previous research,to fourteen years. As such, in this paper we present a comparitive dynamic which may be mapped on to other similarcomparitive studies. Our results will be of interest in professionals and academics who are involved in the fields oftaxation, debt and equity in Eastern Europe and Russia. The schema utilised here may be applied in a similar manner toexamine the development of similar economies in Eastern Europe and further afield.

scholarly journals The determinants of capital structure of microfinance institutions in Ghana

2013 ◽  
Vol 10 (2) ◽  
pp. 270-279 ◽  
Author(s):  
Anthony Kyereboah-Coleman
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Board Independence ◽  
Microfinance Institutions ◽  
Short Term ◽  
Empirical Results ◽  
Finance Theory ◽  
The Capital Structure

Using a panel data methodology, this study examines the determinants of capital structure of 52 microfinance institutions (MFIs) in Ghana. The empirical results show that the MFIs are highly leveraged and that their capital structure is explained partly by standard finance theory and by other unconventional variables. Specifically, the study confirms that leverage is positively related to asset tangibility, with small MFIs using short-term and large MFIs using long-term debt. Though, the findings confirm that leverage is inversely related to risk, they also suggest that some MFIs enjoy long-term debt in spite of risk, while profitability is irrelevant in explaining the capital structure decisions of MFIs. Finally, the study shows that the reputation and board independence of MFIs significantly and positively affect their capital structure decisions.

scholarly journals How do the Tax Burden and the Fiscal Space in Latin America look like? Evidence through Laffer Curves

2021 ◽  
pp. 1-26
Author(s):  
Ignacio Lozano-Espitia ◽  
Fernando Arias-Rodríguez
Keyword(s):  
Latin American ◽  
Tax Rates ◽  
National Accounts ◽  
Effective Tax Rates ◽  
Fiscal Space ◽  
Factor Returns ◽  
Latin American Countries ◽  
Neoclassical Growth ◽  
Laffer Curves

How much fiscal space do Latin American countries have to increase their tax burdens in the long term? This paper provides an answer through Laffer curves estimates for taxes on labor, capital, and consumption for the six largest emerging economies of the region: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. Estimates are made using a neoclassical growth model with second-generation human capital and employing data from the national accounts system for the period from 1994 to 2017. Our findings allow us to compare the recent effective tax rates on factor returns against those which would maximize the government's revenues, and therefore to derive the potential tax-related fiscal space. Results suggest that joint fiscal space on labor and capital taxes would reach 6.5% of GDP for the region, on average, and that there are important differences among the countries.

scholarly journals The Determinants Of Financial Leverage Of SMEs In Mauritius

2011 ◽  
Vol 10 (3) ◽  
pp. 113 ◽  
Author(s):  
M.P. Odit ◽  
Y.D. Gobardhun
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Small And Medium Enterprises ◽  
National Income ◽  
Order Theory ◽  
Financial Leverage ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Flow Problems ◽  
Medium Enterprises

The key aim of this paper is to test the relevance of the different financing theories for explaining capital structure choice in the Small and Medium Enterprises (SMEs) sector in Mauritius. One of the areas of financial theory that has worried much of academicians and professionals is debt policy decisions in firms due to the limited study in this field. Three of the most relevant theories of capital structure are explored, namely the Trade Off Theory, the Agency Theory and the Pecking Order Theory (POH). Hence, in order to shed more light over this issue, an empirical analysis has been carried out over a panel data sample of 25 firms of SMEs for the period 2002-2008, using quantitative analysis. The panel data methodology is used to test empirical hypotheses and controls for firm heteroskecedasticity and corrects for autocorrelation among the variables that are involved. The findings show that some theories are not in line as such with the results obtained from the analysis as the POH. However, some of the Capital Structure Theories are considered important in determining financial leverage of SMEs in Mauritius like agency costs involved, information asymmetry problems, liquidity and cash flow problems. The main implication of this study is to understand the position of SME in Mauritius in terms of their debt and its importance and contribution to the National Income.

Tax Clienteles and Debt Maturity

2000 ◽  
Vol 22 (2) ◽  
pp. 22-39 ◽  
Author(s):  
Elaine Harwood ◽  
Gil B. Manzon
Keyword(s):  
Capital Structure ◽  
Debt Maturity ◽  
Tax Rates ◽  
Short Term ◽  
Maturity Structure ◽  
Tax Shields ◽  
Marginal Tax Rates ◽  
Outstanding Debt ◽  
Larger Sample

We examine the proposition that the expected value of future interest tax shields affects firms' preferences for long-term vs. short-term debt. We extend prior work that has focused on incremental debt issuances (Newberry and Novack 1999; Guedes and Opler 1996) by examining the maturity structure reflected in the portfolio of firms' outstanding debt at year-end. Thus, our study tests a wider range of capital structure activities and includes a much larger sample of firms than examined in prior studies. Our results indicate that firms with high marginal tax rates use more long-term debt than do firms with low marginal tax rates. These findings are consistent with the existence of tax clienteles for financing with debt of different maturities.

Effective Tax Rates in Corporate Taxation: a Quantile Regression for the EU

2014 ◽  
Vol 25 (5) ◽  
Author(s):  
Francisco J. Delgado ◽  
Elena Fernandez-Rodriguez ◽  
Antonio Martinez-Arias
Keyword(s):  
Quantile Regression ◽  
Corporate Taxation ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
The Eu

scholarly journals Capital Structure and Firm Performance in Australian Service Sector Firms: A Panel Data Analysis

2020 ◽  
Vol 13 (9) ◽  
pp. 214 ◽  
Author(s):  
Rafiuddin Ahmed ◽  
Rafiqul Bhuyan
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Capital Structure ◽  
Performance Measures ◽  
Service Sector ◽  
Panel Data Analysis ◽  
Cross Sectional ◽  
The World ◽  
The Relationship

Using cross-sectional panel data over eleven years (2009–2019), or 1001 firm-year observations, this study examines the relationship between capital structure and firm performance of service sector firms from Australian stock market. Unlike other studies, in this study directional causalities of all performance measures were used to identify the cause of firm performance. The study finds that long-term debt dominates debt choices of Australian service sector companies. Although the finding is to some extent similar to trends in debt financed operations observed in companies in developed and developing countries, the finding is unexpected because the sectoral and institutional borrowing rules and regulations in Australia are different from those in other parts of the world.

scholarly journals DETERMINAN VARIASI EFFECTIVE TAX RATES (ETRS) PERUSAHAAN DAN REFORMASI PAJAK: STUDI TERHADAP PERUSAHAAN YANG TERDAFTAR DI BEI PERIODE 2008-2009

2019 ◽  
Vol 8 (1) ◽  
pp. 51
Author(s):  
Dewi Kartika Sari
Keyword(s):  
Capital Structure ◽  
Firm Size ◽  
Tax Reform ◽  
Opposite Sign ◽  
Investment Decision ◽  
Capital Intensity ◽  
Political Connection ◽  
Tax Rates ◽  
Fixed Asset ◽  
Effective Tax Rates

<p class="Style1">This study examines the determinants of the variability in corporate effective tax rates (ETRs) in Indonesia spanning the taxation reform. Previous studies have found that there is an association between firm size, capital structure, corporate investment decision and corporate ETRs. In this study political connection (Adkulcari et al., 2006) is added as a complement of the firm size and corporate ETRs association explanation. Our results indicate that capital structure (leverage), capital-intensity, and inventory-intensity have an association with the variability of corporate ETRs in Indonesia. The opposite sign of estimated coefficient regression of capital-intensity variable might be because there is a capital lease asset in the fixed asset component. This study failed to find the association between firm size, R&amp;D intensity, political connection, tax reform, and ETRs.</p>

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