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What are the Capital Structure Determinants for Tax‐Exempt Organizations?

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  • Geoffrey Peter Smith

Abstract

I study the determinants of capital structure in the absence of tax incentives. I find that debt use is positively related to asset tangibility, growth, and size, and negatively related to age, liquidity, and profitability. Tax‐exempt sector‐specific findings indicate that debt is also positively related to the efficacy of state laws against the misuse of assets and to the percentage of decision makers that are paid and negatively related to decision‐maker compensation and to charitable contributions. Religious organizations most commonly borrow from internal sources, those in education use tax‐exempt bonds, while human services organizations use mortgages and notes payable.

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  • Geoffrey Peter Smith, 2010. "What are the Capital Structure Determinants for Tax‐Exempt Organizations?," The Financial Review, Eastern Finance Association, vol. 45(3), pages 845-872, August.
    • Handle: RePEc:bla:finrev:v:45:y:2010:i:3:p:845-872
    DOI: 10.1111/j.1540-6288.2010.00274.x
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    Cited by:

    1. Rafal Koziarski, 2013. "Analiza ryzyka przedsiębiorstwa na przykładzie przedsiębiorstwa z branży 35 - Wytwarzanie, przesyłanie, dystrybucja i handel energią elektryczną. Risk analysis of the firm in Sector 35 - Production of," Working Papers hal-00917794, HAL.
    2. Harvey S. Rosen & Alexander J.W. Sappington, 2016. "To Borrow or Not to Borrow? An Analysis of University Leverage Decisions," Working Papers 249, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Harvey S. Rosen & Alexander J. W. Sappington, 2016. "To Borrow or Not to Borrow? An Analysis of University Leverage Decisions," NBER Working Papers 21951, National Bureau of Economic Research, Inc.
    4. Rosen, Harvey S. & Sappington, Alexander J.W., 2016. "To borrow or not to borrow? An analysis of university leverage decisions," Research in Economics, Elsevier, vol. 70(1), pages 170-185.
    5. Sohrabi, Narges & Movaghari, Hadi, 2020. "Reliable factors of Capital structure: Stability selection approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 77(C), pages 296-310.
    6. repec:aer:wpaper:329 is not listed on IDEAS

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