Taxes and corporate borrowing: Empirical evidence from selected african countries.
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Date
2011
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Abstract
In this study the authors examine the effect of taxes on corporate borrowing in selected African countries. With use of a panel regression model, their results suggest that taxation is not important in explaining corporate borrowing decisions. However, they found significant relationships between the other firm-level characteristics and debt-equity ratio. Firm age, for instance, shows a negative effect on debt-equity ratio in Ghana and Kenya but registers a positive effect on debt-equity ratio in South Africa. Firm size signals a positive effect on debt-equity ratio in Kenya and South Africa. Also, debt-equity ratio is negatively affected by profitability in Kenya and growth potential in Nigeria.
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Keywords
Africa, corporate borrowing, taxes
Citation
Taxes and corporate borrowing: Empirical evidence from selected african countries. Journal of African Business, 12(2), 287-303.