Incorporation in offshore financial centers: Naughty or Nice?

Warren Bailey and Edith X. Liu

International Review of Finance, 2025, vol. 25, issue 2

Abstract: We highlight the importance of law and regulation using firms incorporated in offshore financial centers (OFCs) that promise an efficient institutional environment but can also enable expropriation of minority shareholders. We find SEC action is more likely for these firms, which is consistent with lower investor valuation and our model's intuition. Our identification strategy using a Cayman Islands corporate law change, a related court decision, and increases in government scrutiny confirms that easier takeover provisions benefit minority shareholders. Thus, whether these unusual jurisdictions are beneficial or destructive depends on law, regulation, and firm, home country, and listing country characteristics.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/irfi.70022

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:irvfin:v:25:y:2025:i:2:n:e70022

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1369-412X

Access Statistics for this article

International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman

More articles in International Review of Finance from International Review of Finance Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().