Abstract
This paper investigates the influence of the corporate income tax reform in 2007 on capital structure choices of firms in China. The results show that corporate income tax reform decreases the effective tax rate of firms totally. The effective tax rate decreases from the year of the reform and then goes up with the increase of the average leverage during the year of 2009–2010. The results also show that the corporate income tax rate is a determinant of capital structure and the change of effective tax rate has positive impact on the change of leverage. There is no evidence that non-debt tax shields are determinants of capital structure and there is not a substitution effect between debt and non-debt tax shields in our sample.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
