The Effects of“ Replacing Business Tax with VAT Reform” on Firms’Capital Structure: An Analysis Based on the Perspective of No-DebtRelated Tax Shields(PDF)
《南京师大学报》(社会科学版)[ISSN:1006-6977/CN:61-1281/TN]
- Issue:
- 2019年01期
- Page:
- 130-
- Research Field:
- 经济学研究
- Publishing date:
Info
- Title:
- The Effects of“ Replacing Business Tax with VAT Reform” on Firms’Capital Structure: An Analysis Based on the Perspective of No-DebtRelated Tax Shields
- Author(s):
- YAO Yutao; WANG Yuetang
- Keywords:
- business tax replaced with VAT reform; capital structure; no-debt related tax shields; taxexhaustion status; ownership
- PACS:
- -
- DOI:
- -
- Abstract:
- Institutional environment is an important factor influencing capital structure. Based on the reformto replace the business tax with a value-added tax, this paper seeks to explore how the reform affects capitalstructure from the perspective of no-debt related tax shields. Empirical results suggest that the reform to replacebusiness tax with a value-added tax has decreased interest-bearing debt significantly, especially for firms whichare almost in a tax exhaustion status. Compared with state-owned enterprises, the non-state-owned firms aremore obviously affected by the reform, giving stronger empirical support to the hypothesis of tax exhaustionstatus. Additionally, the results above are more pronounced in long-term interest-bearing debt. However,short-term interest-bearing debt does not show the same results. Our results not only provide new evidence onsubstitution effect between no-debt related tax shields and capital structure, but also suggest that the ownershipof the firms affects the choice of capital structure.
Last Update: 2019-01-25