Grey zones in global finance: The distorted geography of cross-border investments
Delatte, Anne-Laure; Guillin, Amelie; Vicard, Vincent (2022), Grey zones in global finance: The distorted geography of cross-border investments, Journal of International Money and Finance, 120, p. 102540. 10.1016/j.jimonfin.2021.102540
TypeArticle accepté pour publication ou publié
Journal nameJournal of International Money and Finance
MetadataShow full item record
Center for Economic Policy Research [CEPR]
Laboratoire d'Economie de Dauphine [LEDa]
Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique [ERUDITE]
Centre d'Etudes Prospectives et d'Informations Internationales [CEPII]
Abstract (EN)Complex cross-border financial structures inflate measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40% of global assets (FDI, portfolio equity and debt) are ‘abnormal’ – unexplained – and operated through tax havens. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away.
Subjects / KeywordsCross-border investments; Capital openness; Tax havens; Gravity equation
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