Grey zones in global finance: The distorted geography of cross-border investments

Anne-Laure Delatte, Amelie Guillin and Vincent Vicard

Journal of International Money and Finance, 2022, vol. 120, issue C

Abstract: 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.

Keywords: Cross-border investments; Capital openness; Tax havens; Gravity equation (search for similar items in EconPapers)
JEL-codes: F23 G21 H22 H32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560621001911
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Grey zones in global finance: The distorted geography of cross-border investments (2022)
Working Paper: Grey ZOnes in Global Finance: the Distorted Geography of Cross Border Investments (2021)
Working Paper: Grey Zones in Global Finance: the Distorted Geography of Cross-Border Investments (2020)
Working Paper: Grey Zones in Global Finance: the distorted Geography of Cross-Border Investments (2020)
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:eee:jimfin:v:120:y:2022:i:c:s0261560621001911

DOI: 10.1016/j.jimonfin.2021.102540

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().