How closely is the US stock market linked to Caribbean tax havens?

Faruk Balli, Iftekhar Chowdhury () and Mabruk Billiah ()
Additional contact information
Iftekhar Chowdhury: Independent Researcher
Mabruk Billiah: Prince Mohammad Fahd University

Economics Bulletin, 2025, vol. 45, issue 1, 166 - 176

Abstract: This study is the first to examine the interconnectedness of the US equity market with eight Caribbean tax havens. It reveals significant, similar shock transmission between these markets during both bull and bear markets, with the exceptions of the Bahamas and Barbados. The Cayman Islands show substantial two-way shock transmission with the US, but only during normal market conditions. Post-COVID, significant shifts in network strength and direction are observed, likely due to the sensitivity of these tax havens to international capital flows. Macroeconomic uncertainty and investor sentiment explain these findings.

Keywords: Caribbean Equity Markets; Quantile Vector Autoregression; Tail Dependence; Network Diagram (search for similar items in EconPapers)
JEL-codes: G1 G2 (search for similar items in EconPapers)
Date: 2025-03-30
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