How Does Removing the Tax Benefits of Debt Affect Firms? Evidence from the 2017 U.S. Tax Reform
利用2017年美国税改中除小企业外限制债务税收优惠的政策，通过断点回归发现债务税收优惠减少导致企业债务显著下降，但股权融资未充分弥补，投资也因资本成本上升而减少。
Abstract The impact of tax benefits of debt on firms remains an open question. The 2017 U.S. tax reform limited the tax advantage of debt for all firms except for small businesses with average sales below $25 million. A regression discontinuity design based on the exception threshold shows that, as tax benefits of debt shrink, corporate debt declines significantly, while equity does not increase sufficiently to offset the reduction. Treated firms also decrease their investments due to the higher cost of capital. Overall, we document a first-order role for tax incentives that affect the cost of capital in shaping corporate policies.