Browsing by Subject "Capital structure"

Now showing 1 - 2 of 2
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    Open Access
    Costs of debt, tax benefits and a new measure of non-debt tax shields: examining debt conservatism in Spanish listed firms
    (2018) Clemente-Almendros, José A.; Sogorb-Mira, Francisco
    In spite of the fact that there is empirical evidence that debt tax benefits add to firm value, additional research is needed to explain the apparently conservative debt policy of many firms. This study exam- ines whether the costs of debt and non-debt tax related issues might shed some light on the apparent “conservative leverage puzzle” for Spanish listed firms throughout the period 2007–2013. Specifically, we compare the costs of financial distress with the potential tax benefits of debt. In addition, we test whether debt conservativeness, measured by the kink, is explained by different costs of debt and non- debt tax shields. Our findings suggest that the most conservative Spanish listed firms may not be acting sub-optimally with respect to the tax advantage of debt financing. Furthermore, the results obtained are consistent with the belief that debt costs might offset the tax benefits stemming from debt financing, and debt and non-debt tax shields could act as substitutes
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    Open Access
    What determines intragroup debt financing? Spanish evidence
    (Universidad de Murcia, Servicio de Publicaciones, 2024) Grau-Vera, David; Sogorb-Mira, Francisco
    In this paper, we examine the determinants of internal or intragroup debt financing and its relationship with other debt funding alternatives, especially external debt. We perform a panel data analysis with a sample of 787 non-financial Spanish companies actively financing their operations with intragroup debt during the six-year period between 2013 and 2018. Our results show that intragroup debt positively depends on size and assets tangibility, but it is negatively related to profitability, age, and growth. We also find that greater intragroup debt funding substitutes a reduction in external debt of as much as a quarter. Furthermore, weidentify a hierarchy of preferences in the selection of different financing pathways, with intragroup debtmuch supporting the pecking order theory than external debt.