Julien Martin, Mathieu Parenti & Farid Toubal , 2020.
"Corporate tax avoidance and industry concentration,"
CEPII Working Paper 2020- 09 , July 2020 , CEPII.

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.

Tax Avoidance ; Industry Concentration ; IRS Audit Probability