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Trade-based money laundering and domestic resource mobilization in oil-exporting Countries

Year: 2024

Type: article

Abstract: The rapid evolution of global trade offers great productivity gains to participating countries but also raises the likelihood of losing domestic resources through trade-based money laundering. This paper empirically examined whether trade-based money laundering affects domestic resource mobilization in nine selected Organization of Petroleum Exporting Countries (OPEC) member states from which panel data spanning 2009–2018 were obtained. The panel quantile regression estimator was used to analyze the data. The empirical result showed that trade-based money laundering reduces government revenue and weakens the ability of the government to mobilize domestic resources to fulfil its fiscal responsibilities. The magnitude of impact exhibits an increasing trend as the adverse effect is more pronounced in countries with high domestic resources and less severe in countries with low domestic resources. Therefore, policymakers and governments of OPEC member states should design and ensure the effective implementation of anti-money laundering policies to tame trade-based money laundering.

Source: Journal of Economic Criminology

DOI: 10.1016/j.jeconc.2024.100122

Authors: Joshua Adeyemi Afolabi, Musibau Adetunji Babatunde

Institutions: Nigerian Institute of Social and Economic Research, University of Ibadan

Language: English

Topic: Taxation and Compliance Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,500