Taxation and Corporate Financial Policy

Alan Auerbach

No 8203, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper 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: G30 H32 (search for similar items in EconPapers)
Date: 2001-04
New Economics Papers: this item is included in nep-fin
Note: CF PE
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Citations: View citations in EconPapers (22)

Published as Auerbach, Alan J., 2002. "Taxation and corporate financial policy," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 19, pages 1251-1292 Elsevier.

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