A Study On The Impact Of Tax Shield On The Capital Structure Of A-Share Listed Companies

The development of China’s companies is facing the triple market pressure of demand contraction,supply shock and expectation weakening.Superimposed on the impact of the COVID-19,the economic environment is becoming more severe and complex.In the new stage of development,the company must clarify the appropriate capital needs and arrange reasonable sources of funds in order to rely on capital strength to support transformation and upgrading,and achieve true high-quality development.Optimizing the capital structure is not only an inevitable measure for the company to reduce financial risks,but also a ballast stone for coping with economic fluctuations and achieving stability and progress.Modern capital structure theory based on MM theory holds that the optimal capital structure is formed on the basis of balancing the tax deduction effect of debt interest with financial risk.Rational companies with the goal of maximizing profits will make reasonable use of tax shields such as debt interest and depreciation and amortization,and give full play to their role in reducing financing costs and reducing tax burdens.Therefore,the impact of tax factors on the company’s financing decisions cannot be ignored,providing new ideas for the company to optimize its capital structure and enhance its operating efficiency.Based on MM theory,trade-off theory,prioritized financing theory and agency cost theory,this paper analyzes the mechanism of the impact of debt tax shield and non-debt tax shield on corporate capital structure.By collecting the financial data of A-share listed companies in Shanghai and Shenzhen stock markets,the paper analyzes their capital structure,tax burden and the actual use of tax shield.In order to better fit my country’s national conditions,this paper discusses the financing status of listed companies with different owner ships and industries,and compares the differences in the effect of tax shield on the capital structure of state-owned listed companies and non-state-owned listed companies,real estate listed companies and high-tech listed companies.In the empirical part,we use the panel data of A-share listed companies from 2010 to 2019 to test the impact of the tax shield on capital structure.Based on theoretical analysis and the empirical results,this paper draws the following conclusions:(1)There is a significant positive correlation between debt tax shield and capital structure.(2)There is a significant negative correlation between non-debt tax shield and capital structure.(3)The tax shield has different There are differences in the degree of influence of companies with property rights.(4)There are differences in the degree of influence of tax shields on companies in different industries.In order to optimize the capital structure,this paper puts forward the following suggestions:companies should pay attention to the tax shield tool,actively adjust the capital structure,taking into account financing needs and financial risks;strengthen financing management,deepen institutional reform,and achieve the goal of reducing costs and increasing efficiency;conform to industry trends,and promote stable economic growth.