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Type: Journal article
Title: Expropriations, property confiscations and new offshore entities: evidence from the Panama Papers
Author: Bayer, R.
Hodler, R.
Raschky, P.A.
Strittmatter, A.
Citation: Journal of Economic Behavior and Organization, 2020; 171:132-152
Publisher: Elsevier
Issue Date: 2020
ISSN: 0167-2681
Statement of
Ralph-C. Bayer, Roland Hodler, Paul A. Raschky, Anthony Strittmatter
Abstract: We study a motive for why individuals may hide wealth in offshore entities that has received scant attention in the academic literature and the public debate: the fear of expropriation. We use the Panama Papers and data on media reporting on expropriations and property confiscations. We document that such news reports increase the probability that offshore entities are incorporated by agents from the same country in the same month. This result is robust to the use of country-year- and month-fixed effects and the exclusion of tax havens. The effect is stronger in countries with well-functioning governments. We argue that individuals start hiding their proceeds from illegal activities in offshore entities when reasonably well-intended and well-functioning governments become more serious about law enforcement.
Keywords: Expropriations and confiscations; Offshore entities; Tax havens; Panama Papers
Rights: © 2020 Elsevier B.V. All rights reserved.
RMID: 1000014317
DOI: 10.1016/j.jebo.2020.01.002
Appears in Collections:Economics publications

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