2. Universidad Cardenal Herrera-CEU

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. Our empirical evidence supports the existence of a tax reform effect, where companies affected by interest deductibility limitations reduce their leverage more than companies that are not affected.

The potentially important impact of taxation on corporate financing decisions is widely recognized despite the fact that the empirical evidence is far from conclusive. In this study, we assess the debt tax benefits of Spanish listed firms throughout the period 2007-2013. Specifically, using a simulation approach, we found the capitalized value of gross interest deductions amounts to approximately 6.4% of firms’ market value, while the net debt benefit (of personal taxes) is estimated at 2.1%, in contrast to the traditional 11.4% (i.e. marginal tax rate times debt). Conversely, the panel data regression approach reveals a 13.6% (34.2%) debt tax shield in terms of firm (debt) value. This evidence supports the view that taxes influence corporate decision-making and that debt makes a reasonable contribution to firm value.

Los impuestos son, económica y estadísticamente, determinantes importantes de la estructura de capital de las empresas y, por tanto, no son un factor de segundo orden en las decisiones de endeudamiento de las empresas. Así lo prueba el trabajo de investigación realizado al que nos referiremos en las siguientes líneas.