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Redefining "Offshore" in Latin America




Offshoring and outsourcing are two terms-often used interchangeably-that comprise an essential element of the modern post-industrial global economy. Analysis of this phenomenon in the United States is often framed in the light of job loss and economic decline relating to the manufacturing or low-end services sectors, but this paper will revisit the traditional offshore industry-that of offshore finance and offshore financial centers (OFCs) and compare OFC offshoring with traditional offshoring in Latin America. This paper argues that some similarities are evident when comparing OFC offshoring with traditional offshoring but many differences exist. Using the framework or "lens" of politics certain OFC offshoring issues and tensions with the onshore world relating to unfair tax competition, money laundering, sovereignty, secrecy, regulation, trust, and reputation are analyzed and are shown to be more onerous, tense and different from those occurring in the mainstream offshoring/outsourcing world. In addition, using the "lens" of cyberspace and e-commerce, and a case study of the Cayman Islands and the Bahamas, this paper argues that the creation of an electronic infrastructure in the OFC offshoring world is as necessary as in the onshore world, but the actors and institutions creating and promoting such infrastructures are different. Future work could pursue more reputable and comparative data gathering to further more rigorous statistical modeling of the relationships both "between" OFCs as they compete for offshore capital, and between offshore and onshore as the onshore world seeks to further lift the veil of offshore financial opacity, particularly related to issues of money laundering. Copyright (c) 2009 Copyright the Author. Journal compilation (c) 2009 Wiley Periodicals, Inc..

Suggested Citation

  • Sharon C. Cobb, 2009. "Redefining "Offshore" in Latin America," Growth and Change, Wiley Blackwell, vol. 40(2), pages 332-356.
  • Handle: RePEc:bla:growch:v:40:y:2009:i:2:p:332-356

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    References listed on IDEAS

    1. Esther C Suss & Oral Williams & Chandima Mendis, 2002. "Caribbean offshore Financial Centers; Past, Present, and Possibilities for the Future," IMF Working Papers 02/88, International Monetary Fund.
    2. Beverley Mullings, 2004. "Globalization and the territorialization of the new Caribbean service economy," Journal of Economic Geography, Oxford University Press, vol. 4(3), pages 275-298, June.
    3. Hampton, Mark P., 1994. "Treasure islands or fool's gold: Can and should small island economies copy Jersey?," World Development, Elsevier, vol. 22(2), pages 237-250, February.
    4. James R. Hines & Eric M. Rice, 1994. "Fiscal Paradise: Foreign Tax Havens and American Business," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 149-182.
    5. Barney Warf, 1995. "Telecommunications and the Changing Geographies of Knowledge Transmission in the Late 20th Century," Urban Studies, Urban Studies Journal Limited, vol. 32(2), pages 361-378, March.
    6. Luca Errico & Alberto Musalem Borrero, 1999. "Offshore Banking; An Analysis of Micro- and Macro-Prudential Issues," IMF Working Papers 99/5, International Monetary Fund.
    7. Sharon Cobb, 2003. "Offshore Financial Services and the Internet: Creating Confidence in the Use of Cyberspace?," Growth and Change, Wiley Blackwell, vol. 34(2), pages 244-259.
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    Cited by:

    1. Butkiewicz, James L. & Gordon, Leo-Rey C., 2013. "The Economic Growth Effect of Offshore Banking in Host Territories: Evidence from the Caribbean," World Development, Elsevier, vol. 44(C), pages 165-179.

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