The Impact of External Environment on Capital Structure Change of Taiwan’s ICT Firms

• Main Authors: Kai-Chen Chun, 詹凱鈞
• Other Authors: Chih-Young Hung
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/96915915199841510547

碩士 === 國立交通大學 === 科技管理研究所 === 96 === There are many financial characteristics about Taiwan’s ICT industry, like capital concentrated, market uncertainly, short product life-cycles and high risk. Firms face a drastically quick environment. When the external environment changed, they must choose a suitable capital structure to take advantage of the benefits of low capital costs and financing risk. The Tax Integration Policy has two important features, i.e., the imputation tax credit to shareholders and the 10% surtax levied on undistributed earnings. This study examines the impact on corporate change of capital structure by using the Chow breakpoint test and aims to examine the determinants of corporate capital structure by using panel-data regression model before and after the policy was implemented in Taiwan in 1998. The empirical results show that, under the new tax policy, companies have changed their capital structure and decreased debt ratios. The findings of this study also tell us, after The Tax Integration Policy implementation, companies with greater undistributed earnings ratios and tangible assets tend to have lower debt ratios, while companies with greater non-debt tax shields tend to have higher debt ratios, consistent with our expectations.