Corporate Tax Avoidance and Sales: Micro Evidence and Aggregate Implications

Pré-publication, Document de travail: 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. We find a causal impact of CTA on sales in US firm-level data. CTA increased more among the largest firms, which has reinforced their dominant position. A quantitative exercise reveals that the strength of CTA in shaping changes in the distribution of sales varies across industries. In industries like computers or chemicals, CTA can explain up to 10%-30% of the increase in concentration from 1994 to 2017. Further analysis shows the impact.

Auteur(s)

Julien Martin, Mathieu Parenti, Farid Toubal

Date de publication
  • 2023
Mots-clés JEL
D22 D4 F23 H26 L11
Mots-clés
  • Tax Avoidance
  • Distorted Sales
  • Industry Concentration
  • IRS Audit Probability
Référence interne
  • Eu Tax Observatory Working Paper n°16
Version
  • 1