We test the determinants of leverage within the trade-off and pecking order framework, and the speed of adjustment to the target leverage of large and small firms quoted on a regulated (Main) and relatively unregulated market (AIM) in the UK. We find that both firm size and market of quotation...

We use a multitude of tax reforms across OECD countries as natural experiments to estimate the market value of the tax benefits of debt financing. We report time-series evidence that tax reforms are followed by large changes in the value of corporate equity. However, the impact of tax reforms is...

We use nearly 500 shifts in statutory corporate and personal income tax rates as natural experiments to assess the effect of corporate and personal taxes on capital structure. We find both corporate and personal income taxes to be significant determinants of capital structure. Based on ex-post...