Eurasian Business Review

, Volume 8, Issue 3, pp 323–339 | Cite as

The association between competition power in markets and tax avoidance: evidence from Tehran stock exchange

  • Behnam Karamshahi
  • Zeinab Azami
  • Tabandeh Salehi
Original Paper


The current research aimed at studying the association between the power of competition in markets and tax avoidance in the companies complied with Tehran stock exchange. To evaluate competition power in the markets, 2 variables are used, namely, Herfindahl-Hirschman Index (HHI) and entrance obstacles. The dependent variables in this paper were effective tax rate (ETR) and adjusted non-taxable income. The research sample included 72 companies listed on Tehran Stock Exchange during 2006–2015. To assess the research hypotheses, a multi-variable regression was utilized. The research findings revealed a negative relationship between HHI and the ratio of entrance obstacles on the one hand and ETR on the other hand. Thus, the higher the power of competition in a company was, the more the tax avoidance was found. Also, a significant association was observed between HHI and the adjusted non-taxable income. Finally, no significant relationship was seen between the entrance obstacles and adjusted non-taxable incomes.


Tax avoidance Competition power in the market Herfindahl-Hirschman Index (HHI) Adjusted non-taxable income 


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Copyright information

© Eurasia Business and Economics Society 2017

Authors and Affiliations

  1. 1.Baft Higher Education CenterShahid Bahonar University of KermanKermanIran

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