Empirical Research on China’s Corporate Income Tax and Corporate Capital Structure

Li Wenhong and Qiu Kun

International Journal of Financial Economics, 2015, vol. 4, issue 2, 109-114

Abstract: In 2008, the domestic and foreign corporate income tax systems were unified in China. Based on data of the listed companies in China from 2006 to 2012 and the established model, we find that income tax rates significantly influence the capital structure of listed companies in China, and there is a positive correlation to the asset-liability ratio. When tax rate falls, the listed company will lower financial leverage, and the main method is through increasing its owners equity, rather than to reduce debt.

Keywords: corporate income tax; capital structure; combination of enterprise income tax (search for similar items in EconPapers)
Date: 2015
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