The effect of taxes on the debt policy of Spanish listed companies

José A. Clemente Almendros ^[2] ; Francisco Sogorb Mira ^[1]
1. [1] Universidad CEU Cardenal Herrera
  
  Universidad CEU Cardenal Herrera
  
  Valencia, España
2. [2] Departamento de Empresa, EDEM Escuela de Empresarios, Valencia
Localización: SERIEs : Journal of the Spanish Economic Association, ISSN 1869-4195, Vol. 7, Nº. 3, 2016, págs. 359-391
Idioma: inglés
Enlaces
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Resumen
- This study explores the role of taxes in explaining companies’ financing decisions. We test whether the corporate tax shields explanation of capital structure is applicable to firms listed on the Spanish stock exchange over the period 2007– 2013. Taxes are found to be economically and statistically significant determinants of capital structure. Our results suggest that marginal tax rates affect the debt policies of Spanish listed companies, and the existence of non-debt tax shields constitutes an alternative to the use of debt as a tax shelter. Consistent with theoretical expectations, there is a stronger relation between debt and taxation in less levered firms. Finally, we empirically estimate the impact of the new thin-capitalization rule put forth by the Spanish government in 2012 on the financing behaviour of Spanish listed companies.