Taxation and Corporate Debt: Are Banks Any Different?

Jost H. Heckemeyer and Ruud de Mooij

National Tax Journal, 2017, vol. 70, issue 1, 53-76

Abstract: Variation in the responsiveness of firms to corporate tax incentives toward debt finance is important for understanding the presumed effects of the debt bias on macro-financial stability. This holds especially for the difference in responsiveness between banks and non-banks. Using a large cross-country micro panel of consolidated firm accounts, we find relatively large responses for the biggest non-financial companies, although these effects are less pronounced as conditional leverage ratios increase. The smallest effects are found for large banks. Results are largely robust for attenuation bias.

Date: 2017
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Related works:
Working Paper: Taxation and corporate debt: are banks any different? (2013)
Working Paper: Taxation and Corporate Debt: Are Banks any Different? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:70:y:2017:i:1:p:53-76

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