The Influence Of Marginal Tax Rates On Capital Structure And Corporate Performance Of Chinese Manufacturing Listed Companies

Influence of income tax on capital structure and corporate performance is an important issue in the research of corporate finance,it also gains continuous attention by domestic and foreign experts.Western scholars research the problem earlier than China,and the theoretical results are also very rich.Initial MM theory thought if the market is no taxes,the way of enterprise financingh and no different influence on the enterprise value However,in real life without tax market does not exist.Debt interest expenses should be lose form companies income tax,but dividends of shareholders are after-tax profit distribution,so in the influence of these factors,companies tend to choose debt financing than other financing because of this advantage.But things turn back when they reach their extreme.Companies cann’t use one hundred percent of the asset-liability ratio,because it can greatly increase the bankruptcy cost of companies,making the companies facing risk,In addition financing decision-making is influenced by factors such as agency cost.Enterprise use debt financing methods which can bring tax revenue,but this way is influenced by many factors,So when making financing decision the enterprise can’t blindly pursue high asset-liability ratio.only truly understanding the mechanism of the influence of tax on capital structure,can corporates make more accurately financing decisions.Income tax is one of the external factors that affect enterprise performance and some formula that measure enterprise performance indicators contain net profit,which is the after-tax profit and equal to gross profit minus the value of after-tax.In a competitive market,enterprises must improve their economic benefits to guarantee not eliminated by the market.So research the relationship between tax burden of enterprise and the corporate performance,combining with actual situation to analyze the result and taking effective measures in time can improve business conditions in time and promote the development of enterprises.Research the influence of income tax on capital structure and corporate performance in actual economic life can provide theoretical theoretical foundation for corporates in financing decisions and operating management.Researching on capital structure has a very important goal that is to improve the performance of enterprises and marginal tax rate is one of the most advanced method to measure enterprise tax burden.After reading lots of articles we can discover that most domestic articles use effective tax rate to measure enterprise tax burden,and the relationship between capital structure and corporate performance is only to return with a single equation ignoring the endogenous.In this article,through hausman test,we found this two aspects indeed affect each other,this circumstance we should build a simultaneous equation model.Then according to the trade-off theory of capital structure,adding bankruptcy cost,collateral value of assets,enterprise scale and liquidity ratio to the model.We analyze the results of regression and calculate tax shield kink of the sample corporate.We hope these studies and rusults can give managers some enlightenment,making the use of funds more efficient and improving enterprise value,strengthening their own strength and competitiveness,improving social and economic resources allocation efficiency,At the same time,providing policy proposal for macroeconomic regulation of enterprise income tax system.In this paper,the general structure is as follows:The first chapter is the introduction of the research background and research significance,research thought and research methods of this article,the place of innovation and deficiency.The two chapter mainly review and sort out the related study of marginal tax rates,related research of the impact of tax on capital structure,related research of the impact of tax enterprise performance and other factors which may affect the performance of the company capital structure of domestic and international literatures.The third chapter is the empirical part,comparing several calculation methods of some main variables,and descriptions of specific calculation process.Through the data of 473 domestic manufacturing listed companies of 2013-2015 to establish simultaneous equation model.Using ROE(rate of return on common stockholders’equity)as a variable measure of enterprise performance,using debt asset ratio as a measure variable of capital structure.The simultaneous equation model was examined and the results showed that the business performance and capital structure of samples company indeed influence each other.Then do correlation test and statistical description to variable,and use GMM(generalized method of moments)estimate simultaneous equation model in stata.Finally draw the conclusion that capital structure and corporate performance is negatively related to the interaction of relationship.High proportion of debt financing will have bad effect on enterprise performance,the better business performances,the lower the proportion of debt financing.And then calculate the distribution and the size of tax shields kink of sample company,we found that Chinese manufacturing enterprises make the use of debt too conservative.The fourth chapter is based on the conclusion of empirical analysis,and puts forward some suggestion on the present situation in China.The fifth chapter is a vision of the future and the shortage of the article.