Corporate Debt Bias: Reasons and Possible Solutions

Güneş Topçu ()
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Güneş Topçu: Çanakkale Onsekiz Mart University

A chapter in New Challenges in Banking and Finance, 2017, pp 1-11 from Springer

Abstract: Abstract This paper examines the asymmetric taxation of debt and equity and its consequences on the capital structure of companies and the economy as a whole. Policy options, the main ones of which include the restriction or elimination of interest deductibility and the allowance for corporate equity, are proposed as solutions to the corporate debt bias. Country-specific examples of the implementation of policy options to eliminate the tax bias on debt financing are presented. Moreover, information on the availability of tax incentives for the encouragement of equity financing in Turkey is given.

Keywords: Corporate debt bias; Capital structure; Allowance for equity; Corporate income tax (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-66872-7_1

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DOI: 10.1007/978-3-319-66872-7_1

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