Open AccessCorporate Taxation and Capital Structure: Evidence from Russia
Author(s) -
Evgeny Ilyukhin
Publication year - 2017
Publication title -
korporativnye finansy
Language(s) - English
Resource type - Journals
ISSN - 2073-0438
DOI - 10.17323/j.jcfr.2073-0438.11.2.2017.7-14
Subject(s) - capital structure , leverage (statistics) , profitability index , market liquidity , panel data , monetary economics , equity (law) , sample (material) , debt ratio , economics , debt , corporate finance , business , financial economics , finance , econometrics , chemistry , chromatography , machine learning , computer science , law , political science
The study aims to empirically analyze whether corporate taxation has an impact on firm capital structure decisions. The results, based on panel data on Russian private (non-listed), non-financial and non-state owned firms, show that taxation has a significant impact on firm financial leverage (negative in terms of long-term debt and positive in terms of equity). The smallest and largest firms of the sample respond more dramatically to effective tax rates. The results are robust according to the applied tests. Moreover, additional empirical results are obtained for the standard capital structure determinants (size, profitability, tangibility and liquidity of assets), which contribute to capital structure theories.