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- Title
Does Corporate Income Taxation Affect Securitization? Evidence from OECD Banks.
- Authors
Gong, Di; Hu, Shiwei; Ligthart, Jenny
- Abstract
Corporate income taxation, by affecting the after-tax cost of funding, has implications for a bank's incentive to securitize. Using a sample of OECD banks over the period 1999-2006, we find that corporate income taxation led to more securitization at banks that are constrained in funding markets, while it did not affect securitization at unconstrained banks. This is consistent with prior theories suggesting that the tax effects of securitization depend on the extent to which banks face funding constraints. Our results suggest that current corporate income tax systems have distorting effects on banks' securitization decisions.
- Subjects
FINANCIAL services industry; CORPORATE taxes; FINANCE; ORGANISATION for Economic Co-operation &; Development; ECONOMIC research
- Publication
Journal of Financial Services Research, 2015, Vol 48, Issue 3, p193
- ISSN
0920-8550
- Publication type
Article
- DOI
10.1007/s10693-014-0210-x