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How closely is the US stock market linked to Caribbean tax havens?

Author

Listed:
  • Faruk Balli

    (Massey University)

  • Iftekhar Hassan Chowdhury

    (Independent Researcher)

  • Mabruk Billiah

    (Prince Mohammad Fahd University)

Abstract

This study is the first to examine the interconnectedness of the US equity market with eight Caribbean tax havens. It reveals significant, similar shock transmission between these markets during both bull and bear markets, with the exceptions of the Bahamas and Barbados. The Cayman Islands show substantial two-way shock transmission with the US, but only during normal market conditions. Post-COVID, significant shifts in network strength and direction are observed, likely due to the sensitivity of these tax havens to international capital flows. Macroeconomic uncertainty and investor sentiment explain these findings.

Suggested Citation

  • Faruk Balli & Iftekhar Hassan Chowdhury & Mabruk Billiah, 2025. "How closely is the US stock market linked to Caribbean tax havens?," Economics Bulletin, AccessEcon, vol. 45(1), pages 166-176.
    • Handle: RePEc:ebl:ecbull:eb-24-00279
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I1-P17.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Caribbean Equity Markets; Quantile Vector Autoregression; Tail Dependence; Network Diagram;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

    Statistics

    Access and download statistics

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