Income Tax Reform, Ownership Structure, and Corporate Finance Behaviour

Abstract

The paper studies the impact of the enterprise income tax reform on
financing behaviour by sampling the listed companies with difference-indifferences
model and multiple regression analysis method. Further analysis is
made on the different characteristics of ownership structure influence of income
tax rate upon financing structure. The study demonstrates that the reform greatly
influences the financing structure. After the reform, the enterprise whose tax rate is
increased tends to raise the debt scale. On the contrary, the enterprise whose tax
rate is decreased tends to reduce the debt scale. Ownership concentration and
corporate debt levels is negatively correlated. The more concentrated the equity,
the less obvious the influence of tax rate change upon enterprise fixed assets
liabilities ratio.
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