Corporate Tax Planning and Industry Concentration

71 Pages Posted: 10 Apr 2023

See all articles by John Gallemore

John Gallemore

University of North Carolina Kenan-Flagler Business School

Jesse van der Geest

Tilburg University

Martin Jacob

WHU - Otto Beisheim School of Management

Christian Peters

Nanyang Technological University

Date Written: March 23, 2023


Recent research has documented that industry concentration has increased significantly over the past 25 years, with potentially negative consequences for competition, productivity, and social welfare. Some have suggested that greater corporate tax planning by industry leaders, which can provide them with a cost advantage over their competitors, has contributed to this trend. As a result, policymakers are targeting such tax planning to reduce industry concentration. We provide large-sample empirical evidence on whether tax planning is associated with industry concentration. In contrast with conventional wisdom, we find that industry leaders generally do not exhibit greater tax planning relative to their closest competitors. Furthermore, industry leader tax planning advantages do not meaningfully explain the trend in industry concentration over our sample period. Finally, we document that industries with plausibly tax planning-induced concentration do not exhibit different aggregate productivity growth than other industries. In short, our findings cast doubt on the idea that corporate tax planning is responsible for increasing industry concentration or other anti-competition industry-level outcomes in recent years.

Keywords: Tax planning, industry concentration, competition, productivity

JEL Classification: D40, H25, M40, M41

Suggested Citation

Gallemore, John and van der Geest, Jesse and Jacob, Martin and Peters, Christian P. H., Corporate Tax Planning and Industry Concentration (March 23, 2023). Available at SSRN: or

John Gallemore (Contact Author)

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States


Jesse Van der Geest

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE

Martin Jacob

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
D-56179 Vallendar, 56179


Christian P. H. Peters

Nanyang Technological University ( email )

Nanyang Business School
91 Nanyang Avenue #05-094
Singapore, 639956
+65 6790 4656 (Phone)

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