The Impact Of Effective Corporate Tax Liability On Corporate Capital Structure

How to control the leverage of enterprises under the new economic normal is an important proposition to prevent macro financial risks and control the financial risks of enterprises.The existence of leverage is unavoidable in the daily operations of enterprises.Therefore,a study of the factors of corporate leverage is important to prevent systemic risks to the economy as a whole and to maintain a sound financial environment.From a macroeconomic perspective,corporate leverage is influenced by a number of factors such as financial policy,the financing environment and taxation policy.Among these,the tax shield effect from taxation is an important variable that affects the cost of capital,which in turn influences corporate capital decisions by affecting the cost of capital.However,the impact of the tax shield effect on the cost of capital is diminishing as the overall tax burden of global corporations continues to decrease.With the overall level of tax burden decreasing,whether the corporate tax burden can still be used as an influencing factor to exert macroeconomic control on enterprises’ ability to control their own leverage is something that the government needs to consider when formulating "deleveraging" policies from a tax perspective.High-tech enterprises are a key focus of China’s economic development,enjoying more tax policies,and are typical representatives of the current group of low-tax burden enterprises in China,whose healthy development is also significantly related to whether their capital structure is reasonable.Taking into account the differences in capital structure preferences between industries,this paper selects the manufacturing industry,which dominates,to study the impact of income tax burden on capital structure among manufacturing high-tech enterprises.Since the discussion of capital structure in domestic and foreign literature,a large number of studies related to the influencing factors of capital structure have emerged since the discussion of MM theory,and among them,taxation has been an important object of research discussion.Based on a clear definition of the core concepts and sorting out the influencing mechanisms,this paper first conducts descriptive statistics on the capital structure and actual tax burden of listed companies in China’s manufacturing and high-tech enterprises to establish a basic understanding of the overall tax burden and capital structure of the sample of manufacturing and high-tech enterprises.Based on the correlation between high leverage and high tax burden in the descriptive statistics,in the subsequent regression analysis,the data of241 listed companies in manufacturing high-tech enterprises from 2010 to 2021,which were obtained after screening,were selected to conduct quantile regression tests to analyse the relationship between the effective tax rate,debt financing and other control variables of the companies.The following main findings were obtained from the empirical study: the effective tax rate showed a positive relationship with the capital structure of companies in general,in line with the expectations of classical capital structure theory.And the degree of influence is increasing as the quantile level of the dependent variable gearing increases,the degree of influence of corporate tax burden on corporate financing choices is gradually increasing.The conclusion suggests that in the case of low tax burden,manufacturing high-tech enterprises still consider the tax shield effect of debt,and this influence effect is greater for enterprises with high gearing.Finally,based on the analysis of the current situation and the empirical results,this paper puts forward relevant suggestions from the viewpoints of both government policy improvement and enterprises’ own development.