This paper discusses the influence of Canadian corporate tax rates on the debt-asset ratios of Canadian firms, 1970-82. Five theoretical models are reviewed and used to construct a linear encompassing model of financial structure. Empirical evidence from Canadian firms from COMPUSTAT files...

Several recently proposed tests for separate regressions are examined in light of recommendations by Cox (1961). This points to simplified criteria and emphasizes the unity underlying the tests. The exact distributions of some of the tests are developed and given a geometrical characterization....