Is export tax rebate a quality signal to determine firms’ capital structure? A financial intermediation perspective

Dongyang Zhang

Research in International Business and Finance, 2021, vol. 55, issue C

Abstract: This paper empirically examines the casual effect of export tax rebates (ETRs) on firm capital structure. The results of analyzing large panel data on Chinese manufacturing firms from 2007 to 2015 suggest that firms that obtain ETRs are more likely to access leverage. Moreover, ETRs affect the leverage ratio through funding fixed assets investments, smoothing financial costs, and alleviating for internal financing. In addition, ETRs are positively associated with leverage through improvements in firm performance, including firms’ total factor productivity, profitability, and labor productivity. Additionally, the effect of ETRs on leverage plays a stronger role in private firms than in state-owned or foreign firms.

Keywords: Export tax rebate; Capital structure; Financial cost; Firm performance (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:55:y:2021:i:c:s027553192030355x

DOI: 10.1016/j.ribaf.2020.101317

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