Corporate tax avoidance and sales: micro evidence and aggregate implications

Julien Martin and Farid Toubal
Authors registered in the RePEc Author Service: Mathieu Parenti ()

No 15060, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper investigates the influence of corporate tax avoidance (CTA) on firm-level sales, and its aggregate implications. CTA gives a competitive advantage to avoiding firms, which affects the distribution of sales in the economy. Using three identification strategies, we find a causal impact of CTA on sales in US firm-level data. In the US, CTA increased more among the largest firms, which has reinforced their dominant position. In key industries, trends in CTA firms explain 10%-30% of the increase in concentration from 1994 to 2017. Further analysis shows the impact of CTA-induced distortions on industrial output is relevant at a macroeconomic scale.

JEL-codes: D22 D4 F23 H26 L11 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-acc and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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