Corporate Tax Avoidance and Industry Concentration
Julien Martin,
Mathieu Parenti () and
Farid Toubal
No 2020-29, Working Papers ECARES from ULB -- Universite Libre de Bruxelles
Abstract:
This paper argues that tax avoidance by large corporations has contributed to the 25% increase in concentration among U.S. firms since the mid-1990s. Corporate tax avoidance gives large firms a competitive edge, which translates into larger market shares and an increase in the granularity of the economy. We develop IV and difference-in-differences strategies that show the causal impact of tax avoidance on firm-level sales. Had firms not resorted to tax avoidance in 2017, our results imply that the average industry concentration would have been 8.3% lower, which is around its early 2000 level.
Keywords: Tax Avoidance; Industry Concentration; IRS Audit Probability (search for similar items in EconPapers)
JEL-codes: D22 D40 F23 H26 L11 (search for similar items in EconPapers)
Pages: 54 p.
Date: 2020-07
New Economics Papers: this item is included in nep-ind and nep-pub
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Citations: View citations in EconPapers (14)
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Related works:
Working Paper: Corporate Tax Avoidance and Industry Concentration (2021)
Working Paper: Corporate Tax Avoidance and Industry Concentration (2021)
Working Paper: Corporate Tax Avoidance and Industry Concentration (2020) 
Working Paper: Corporate tax avoidance and industry concentration (2020) 
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Persistent link: https://EconPapers.repec.org/RePEc:eca:wpaper:2013/309910
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