Taxation and corporate financial policy

Chapter 19 in Handbook of Public Economics, 2002, vol. 3, pp 1251-1292 from Elsevier

Abstract: This chapter reviews the theory and evidence regarding the impact of taxation on corporate financial policy. Starting from a basic characterization of the classical corporate income tax and its effects, the analysis focuses on three areas of research: equity policy, debt-equity decisions, and choices regarding ownership structure and organizational form. The discussion stresses the distinction between nominal and more fundamental financial differences -- for example, in the relationship between borrowing and leasing -- and that financial policy involves choices not only among different underlying policies but also among characterizations of a given policy. The final section offers some brief reflections on the implications of continuing financial innovation.

JEL-codes: H0 (search for similar items in EconPapers)
Date: 2002

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Working Paper: Taxation and Corporate Financial Policy (2001)
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