Expropriations, Property Confiscations and New Offshore Entities: Evidence from the Panama Papers

34 Pages Posted: 21 Feb 2019

See all articles by Ralph C. Bayer

Ralph C. Bayer

University of Adelaide

Roland Hodler

University of St. Gallen; University of Oxford; CESifo (Center for Economic Studies and Ifo Institute)

Paul Raschky

Monash University - Department of Economics

Anthony Strittmatter

CREST-ENSAE

Date Written: 2018

Abstract

Using the Panama Papers, we show that the beginning of media reporting on expropriations and property confiscations in a country increases the probability that offshore entities are incorporated by agents from the same country in the same month. This result is robust to the use of country-year fixed effects and the exclusion of tax havens. Further analysis shows that the effect is driven by countries with non-corrupt and effective governments, which supports the notion that offshore entities are incorporated when reasonably well-intended and well-functioning governments become more serious about fighting organized crime by confiscating proceeds of crime.

Keywords: expropriations and confiscations, offshore entities, tax havens, Panama Papers

JEL Classification: H260, K420

Suggested Citation

Bayer, Ralph C. and Hodler, Roland and Raschky, Paul and Strittmatter, Anthony, Expropriations, Property Confiscations and New Offshore Entities: Evidence from the Panama Papers (2018). CESifo Working Paper No. 7328, Available at SSRN: https://ssrn.com/abstract=3338657 or http://dx.doi.org/10.2139/ssrn.3338657

Ralph C. Bayer (Contact Author)

University of Adelaide ( email )

No 233 North Terrace, School of Commerce
Adelaide, South Australia 5005
Australia

Roland Hodler

University of St. Gallen ( email )

Varnbuelstr. 14
Saint Gallen, St. Gallen CH-9000
Switzerland

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Paul Raschky

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

Anthony Strittmatter

CREST-ENSAE ( email )

France

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