Expropriations, property confiscations and new offshore entities: evidence from the Panama Papers
Files
(Accepted version)
Date
2020
Authors
Bayer, R.
Hodler, R.
Raschky, P.A.
Strittmatter, A.
Editors
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Journal article
Citation
Journal of Economic Behavior and Organization, 2020; 171:132-152
Statement of Responsibility
Ralph-C. Bayer, Roland Hodler, Paul A. Raschky, Anthony Strittmatter
Conference Name
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.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
© 2020 Elsevier B.V. All rights reserved.