Knockin' on H(e)aven's door. Financial crises and hidden wealth

Silvia Marchesi and Giovanna Marcolongo

No 518, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: This paper investigates the link between financial crises in developing countries and variation of bank deposits in offshore financial centers. Using both a two way fixed effects and a stacked difference-in-differences estimator, we find that after three years since the beginning of the crisis bank deposits in tax havens increase by about 20 percent. The effect does not depend on taxation and seems driven by countries with more fragile institutions. We add to the literature on the effects of tax havens: they not only facilitate tax evasion and corruption in "normal times", but also absorb resources during financial crises, when most needed.

Keywords: Sovereign debt crisis; Financial Crisis; Offshore accounts. (search for similar items in EconPapers)
JEL-codes: D73 F34 G15 H63 P16 (search for similar items in EconPapers)
Pages: 28
Date: 2023-04
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-his and nep-iue
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:518

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