Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223541
Authors: 
Martin, Julien
Parenti, Mathieu
Toubal, Farid
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8469
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.
Subjects: 
tax avoidance
industry concentration
IRS audit probability
JEL: 
D22
H26
L11
D40
F23
Document Type: 
Working Paper

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