Bayer, Ralph-C. Hodler, Roland Raschky, Paul A. Strittmatter, Anthony
Year of Publication:
CESifo Working Paper 7328
Using the Panama Papers, we show that the beginning of media reporting on expropriations and property confiscations in a country increases 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 fixed effects and the exclusion of tax havens. Further analysis shows that the effect is driven by countries with non-corrupt and effective governments, which supports the notion that offshore entities are incorporated when reasonably well-intended and well-functioning governments become more serious about fighting organized crime by confiscating proceeds of crime.
expropriations and confiscations offshore entities tax havens Panama Papers