A Study on the Relationship between Effective Corporate Tax Rate and Stock Price

• Main Authors: Ya-Chi Chao, 趙雅琪
• Other Authors: 許義忠
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/8t6b7q

碩士 === 國立臺中科技大學 === 財務金融研究所碩士班 === 107 === In 2017, the Taiwan government raised the profit-seeking enterprise income tax from the current 17% to 20%. Most people think that raising the profit-seeking enterprise income tax will prompt the reduce of available capital and the company''s value, which in turn affects the stock price. However, will raising the profit-seeking enterprise income tax rate really have an impact on the stock price? This paper re-measures the relationship between effective corporate tax rate and stock price by using quarterly average stock price of companies listed in Taiwan over 2010 to 2017, which employed ordinary least squares (OLS) and quantile regression (QR) approach, based on Koenker and Bassett (1978). The empirical results show that under the OLS, the effective corporate tax rate has a significant positive relationship with the stock price; and in the results of QR, it shows the same results. However, the effective corporate tax rate estimation coefficient decrease rapidly with the increase of the component, which means that when the stock price is higher, the effective corporate tax rate has gradually reduced the impact on the stock price. The results of model 5 of QR indicate that the interaction between government policies will offset the impact of the effective tax rate on the stock price, and the change in the profit-seeking enterprise income tax will have no significant explanatory ability.