We investigate the diffusion of tax planning across firms, and the real effects and sharing of benefits from such diffusion. Using supply chain relationships among firms as a possible diffusion channel, we find that tax planning spreads from principal customers to their dependent suppliers. We...

We investigate whether firms in close customer-supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms....