Private Firms and Offshore Finance

37 Pages Posted: 20 Sep 2023

See all articles by Marcelo Ortiz M.

Marcelo Ortiz M.

Universitat Pompeu Fabra; Universitat Pompeu Fabra - Barcelona School of Management; Barcelona School of Economics

Juan Felipe Imbet

Université Paris Dauphine - Department of Finance

Date Written: August 31, 2023


We study how offshore vehicles (OVs) in tax havens affect domestic investment and tax revenues among private firms. OVs encourage domestic investment by reducing the tax burden of OV users. The induced investment can potentially expand the taxable income, creating a trade-off that may counterbalance the direct tax base erosion traditionally associated with OVs. To test these hypotheses, we build and analyze a large data set of European private firms identified as OV users in offshore data leaks. Our findings suggest that OV users invest more and pay more taxes, and that these effects are stronger for standalone firms and for firms operating in intangible industries. For identification, we leverage the sequence of offshore data leaks in a staggered difference-in-difference approach. Our results indicate that OV users reduce investments post-leak while their tax payments remain relatively stable.

Keywords: Offshore Vehicles, Offshore Data Leaks, Tax Havens, Corporate Investment, Tax Avoidance

JEL Classification: H25, H26, F23, G30

Suggested Citation

Ortiz M., Marcelo and Imbet, Juan Felipe, Private Firms and Offshore Finance (August 31, 2023). Available at SSRN: or

Marcelo Ortiz M. (Contact Author)

Universitat Pompeu Fabra ( email )



Universitat Pompeu Fabra - Barcelona School of Management ( email )

Barcelona, 08005

Barcelona School of Economics ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005

Juan Felipe Imbet

Université Paris Dauphine - Department of Finance ( email )

Place du Maréchal de Lattre de Tassigny
Paris Cedex 16, 75775

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