Knockin’ on H(e)aven’s Door. Financial Crises and Hidden Wealth

28 Pages Posted: 27 Apr 2023

See all articles by Silvia Marchesi

Silvia Marchesi

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS); Università degli Studi di Milano-Bicocca - Center for European Studies (CefES); University of Milan - Centro Studi Luca d'Agliano (LdA)

Giovanna Marcolongo

Bocconi University

Date Written: April 27, 2023

Abstract

This paper investigates the link between financial crises in developing countries and the variation of bank deposits in offshore financial centers. Using both a two-way fixed effects and a stacked difference-in-differences estimator, we find that after three years since the beginning of the crisis bank deposits in tax havens increased by about 20 percent. The effect does not depend on taxation and seems driven by countries with more fragile institutions. We add to the literature on the effects of tax havens: they not only facilitate tax evasion and corruption in “normal times”, but also absorb resources during financial crises when most needed.

Keywords: Sovereign debt crisis, Financial Crisis, Offshore accounts

JEL Classification: D73, F34, G15, H63, P16

Suggested Citation

Marchesi, Silvia and Marcolongo, Giovanna, Knockin’ on H(e)aven’s Door. Financial Crises and Hidden Wealth (April 27, 2023). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 518, Available at SSRN: https://ssrn.com/abstract=4429915

Silvia Marchesi (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy
+39 02 64483057 (Phone)

HOME PAGE: http://https://sites.google.com/site/ssilviamarchesi/home

Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

University of Milan - Centro Studi Luca d'Agliano (LdA)

Via P. Amedeo 34
Milano, Mi 20122
Italy

Giovanna Marcolongo

Bocconi University

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