Global money laundering appeal index: application of principal component analysis

Milind Tiwari, Adrian Gepp and Kuldeep Kumar

Journal of Money Laundering Control, 2021, vol. 26, issue 1, 205-211

Abstract: Purpose - The paper aims at developing a global ranking system determining a country's appeal as a destination for money laundering. Design/methodology/approach - This paper uses principal component analysis (PCA), with a mix of standardised and unstandardised components relating to attractiveness, economic freedom and money laundering risk to come up with an index of money laundering appeal. Findings - Four components relating to economic feasibility, financial liberty, government spending and tax regime are critical in influencing a country's money laundering appeal. Research limitations/implications - This paper attempts to use a standardised and replicable methodology to condense into a single measure the complex and multifaceted phenomenon of a country's appeal as a destination for money laundering, thus avoiding the difficulty associated with precisely calculating illicit financial flows. Practical implications - The ranking system could be used to determine the destinations attractive for laundering money. Such information can be used to come up with more effective preventative strategies to combat phenomena responsible for the stagnation of economic growth through tax evasion, corruption and creation of non-competitive markets. Originality/value - It is the first attempt to use a statistical technique to understand the underlying components of a country's money laundering appeal.

Keywords: Money laundering; Principal component analysis; Economic growth; Walker gravity model (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:jmlcpp:jmlc-10-2021-0108

DOI: 10.1108/JMLC-10-2021-0108

Access Statistics for this article

Journal of Money Laundering Control is currently edited by Dr Li Hong Xing and Prof Barry Rider

More articles in Journal of Money Laundering Control from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().