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A look offshore: unpacking the routes of misinvoicing in international trade

Author

Listed:
  • Catalin Dragomirescu-Gaina
  • Leandro Elia

Abstract

We study whether misinvoicing in international trade is reflected in cross-border bank accounts as reported by offshore financial centres. We show that residents hold more offshore wealth when local misinvoicing practices thrive, especially for under-invoiced exports of natural resources. These results are driven by less-developed countries, autocracies, and resource-rich countries, which typically lack institutional capacity and/or political willingness to deter capital flight and misinvoicing practices.

Suggested Citation

  • Catalin Dragomirescu-Gaina & Leandro Elia, 2022. "A look offshore: unpacking the routes of misinvoicing in international trade," WIDER Working Paper Series wp-2022-156, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2022-156
    as

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    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2022-156-a-look-offshore-unpacking-routes-misinvoicing-international-trade.pdf
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    References listed on IDEAS

    as
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    2. Valeria Pellegrini & Alessandra Sanelli & Enrico Tosti, 2016. "What do external statistics tell us about undeclared assets held abroad and tax evasion?," Questioni di Economia e Finanza (Occasional Papers) 367, Bank of Italy, Economic Research and International Relations Area.
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    5. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    6. Javier Garcia-Bernardo & Jan Fichtner & Eelke M. Heemskerk & Frank W. Takes, 2017. "Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network," Papers 1703.03016, arXiv.org, revised May 2017.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Misinvoicing; Banking; Offshore financial centres; Natural resources; International trade; Rent-seeking; Elites; Capital flight;
    All these keywords.

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