Tax Havens and the Production of Offshore FDI: An Empirical Analysis

University of Oxford, School of Geography and the Environment Working Papers in Employment, Work and Finance, No. 13-02

24 Pages Posted: 17 Apr 2013 Last revised: 6 Sep 2013

See all articles by Daniel Haberly

Daniel Haberly

University of Sussex

Dariusz Wojcik

University of Oxford, St. Peter's College

Date Written: April 17, 2013

Abstract

While most research on FDI focuses on the ‘real’ economy, at least 30% of global FDI stock is intermediated through tax havens. Using 2010 IMF data on FDI stocks, this paper sheds new light on geographical, historical, and political determinants of offshore FDI. Despite its intangibility, offshore FDI is as sensitive to physical distance as real FDI. Offshore FDI links are particularly strong between colonial powers and their current and former colonies. The OECD, while officially leading an agenda against tax evasion, internalizes significant offshore FDI within its membership. Indeed, offshore FDI is pervasive, affecting wealthy economies as much as developing countries.

Keywords: FDI, tax havens, offshore financial centres, gravity model

JEL Classification: F23, F65, G15, H26

Suggested Citation

Haberly, Daniel and Wojcik, Dariusz, Tax Havens and the Production of Offshore FDI: An Empirical Analysis (April 17, 2013). University of Oxford, School of Geography and the Environment Working Papers in Employment, Work and Finance, No. 13-02. Available at SSRN: https://ssrn.com/abstract=2252431 or http://dx.doi.org/10.2139/ssrn.2252431

Daniel Haberly (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Dariusz Wojcik

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

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