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Knockin’ on H(e)aven’s door. Financial crises and offshore wealth

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  • Marchesi, Silvia
  • Marcolongo, Giovanna

Abstract

This paper investigates the relationship between financial crises in developing countries and variation of bank deposits in offshore financial centers. Using a stacked difference-in-differences estimator, we find that three years after the onset of the crisis, bank deposits in tax havens increase by almost 30 percent. The effect appears independent of tax rates and is primarily driven by countries with weak institutions. We add to the literature on tax havens as we find that they not only facilitate tax evasion and corruption in “normal times”, but also absorb resources during financial crises, when most needed.

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  • Marchesi, Silvia & Marcolongo, Giovanna, 2025. "Knockin’ on H(e)aven’s door. Financial crises and offshore wealth," Journal of International Economics, Elsevier, vol. 158(C).
    • Handle: RePEc:eee:inecon:v:158:y:2025:i:c:s0022199625001321
    DOI: 10.1016/j.jinteco.2025.104175
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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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