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Determinants of Trade Misinvoicing

  • Patnaik, Ila


    (National Institute of Public Finance and Policy)

  • Gupta, Abhijit Sen


    (Jawaharlal Nehru University)

  • Shah, Ajay


    (National Institute of Public Finance and Policy)

Traditional explanations for trade misinvoicing -- high custom duties and weak domestic economies - are less persuasive in a world of high growth emerging markets who have low trade barriers. We construct a 35- country data set over a 26 year span, covering both industrialised and developing countries, to study the phenomena of export and import misinvoicing. Capital account openness, differentials in interest rates, political stability, corruption, indebtedness and the exchange rate regime are identified as factors related to misinvoicing. Trade misinvoicing should be seen as one element of de facto capital account openness.

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Paper provided by National Institute of Public Finance and Policy in its series Working Papers with number 10/75.

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Length: 31
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:npf:wpaper:10/75
Note: Working Paper 75, 2010
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