Taxes and Financial Distress: Evidence from Establishment-Level Data

SSRN Electronic Journal · 2026-01-01

When Tax Shields Shrink: Interest Deductibility Limitations and Corporate Innovation

SSRN Electronic Journal · 2026-01-01

TWO CENTURIES OF PRESIDENTIAL PUZZLES

SSRN Electronic Journal · 2026-01-01

Taxes and Financial Distress: Evidence from Establishment-Level Data

SSRN Electronic Journal · 2026-01-01

Taxes and Financial Distress: Evidence from Establishment-Level Data

National Bureau of Economic Research · 2026-04-01

We use establishment-level data to examine the relation between corporate taxes and financial distress.Using a border discontinuity design, we document that higher corporate income tax rates significantly increase financial distress, particularly for geographically concentrated firms, with sizable spillovers across establishments.We further investigate how taxes affect establishmentlevel financial distress by exploiting the interest limitation rule introduced by the 2017 Tax Cuts and Jobs Act.Using a difference-in-differences design, we find that affected firms experience a decline in financial distress.This occurs because the reduced tax advantage of debt induces firms to deleverage, reducing financial distress through capital structure adjustments.

Taxes and Private Firms’ Capital Structure Choices

National Bureau of Economic Research · 2025-04-01 · 4 citations

Using limitations to the deductibility of interest payments triggered by the introduction of interest ceiling rules globally, we show that affected private firms reduce leverage relative to unaffected firms.In support of a causal effect of taxes on corporate capital structure choices, we show that the results hold for firms near the thresholds triggering the limitations, in a propensity score matched sample, and in countries required to adopt the interest ceiling rules.In contrast, falsification tests show no reduction in leverage for affected firms around pseudo-reform years.Furthermore, within a country, firms with a higher fraction of nondeductible interest payments are less responsive to tax rate changes.More broadly, across 93 countries, we document that private firms tend to decrease leverage in response to tax rate cuts and increase leverage in response to corporate tax rate hikes.

Exposing the Revolving Door in Executive Branch Agencies

Journal of Financial and Quantitative Analysis · 2025-01-20 · 11 citations

Abstract We develop an extensive mapping of the revolving door phenomenon by examining the work experience of 420,153 individuals in top corporate positions at 12,869 firms. More than half of these firms have at least one such individual with prior experience in one of 187 executive branch agencies. We find that firms are more likely to receive procurement contracts following the appointment of a former regulator transitioning within 2 years of leaving the agency, a result consistent with the “knowledge” hypothesis. Less-complex contracts signed following the appointment of former regulators are more likely to be renegotiated, increasing costs for the government.

<p>Corporate Income Taxes Around the Globe</p>

SSRN Electronic Journal · 2025-01-01

The Externalities Of Corporate Political Connections: Evidence From The Supply Chain

SSRN Electronic Journal · 2025-01-01

Taxes and Private Firms’ Capital Structure Choices

SSRN Electronic Journal · 2025-01-01