Does corporate income taxation affect securitization? Evidence from OECD banks

Di Gong, Shiwei Hu, J.E. Ligthart

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
Pages (from-to)193-213
Number of pages21
JournalJournal of Financial Services Research
Volume48
Issue number3
DOIs
Publication statusPublished - Dec 2015

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Corporate income taxation
Securitization
Funding
Tax system
Corporate income tax
Tax
Incentives
Costs
Tax effects

Keywords

  • Securitization
  • SPVs
  • Corporate income taxes

Cite this

Gong, Di ; Hu, Shiwei ; Ligthart, J.E. / Does corporate income taxation affect securitization? Evidence from OECD banks. In: Journal of Financial Services Research. 2015 ; Vol. 48, No. 3. pp. 193-213.
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Does corporate income taxation affect securitization? Evidence from OECD banks. / Gong, Di; Hu, Shiwei; Ligthart, J.E.

In: Journal of Financial Services Research, Vol. 48, No. 3, 12.2015, p. 193-213.

Research output: Contribution to journalArticleScientificpeer-review

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