The Deterrence Effect of Whistleblowing: An Event Study of Leaked Customer Information from Banks in Tax Havens

56 Pages Posted: 8 Feb 2018

See all articles by Niels Johannesen

Niels Johannesen

University of Copenhagen

Tim Stolper

Max Planck Institute for Tax Law and Public Finance

Multiple version iconThere are 2 versions of this paper

Date Written: December 21, 2017

Abstract

We document that the first leak of customer information from a tax haven bank caused a sudden flight of deposits from tax havens and a sharp decrease in the market value of banks known to be assisting with tax evasion. The loss of market value was largest for the banks most strongly involved in tax evasion and zero for banks with no known ties to tax evasion. Subsequent leaks had qualitatively similar although smaller effects. Our findings suggest that whistleblowing in tax haven banks deters offshore tax evaders by increasing the perceived risk of committing and assisting with tax evasion.

Keywords: whistleblowing, economic crime, tax evasion, tax havens

JEL Classification: G210, H260, K420

Suggested Citation

Johannesen, Niels and Stolper, Tim, The Deterrence Effect of Whistleblowing: An Event Study of Leaked Customer Information from Banks in Tax Havens (December 21, 2017). CESifo Working Paper Series No. 6784. Available at SSRN: https://ssrn.com/abstract=3119558

Niels Johannesen (Contact Author)

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

Tim Stolper

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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