Work

Knockin’ on H(e)aven’s door. Financial crises and offshore wealth

Year: 2025

Type: article

Abstract: This paper investigates the relationship between financial crises in developing countries and variation of bank deposits in offshore financial centers. Using a stacked difference-in-differences estimator, we find that three years after the onset of the crisis, bank deposits in tax havens increase by almost 30 percent. The effect appears independent of tax rates and is primarily driven by countries with with weak institutions. We add to the literature on tax havens as we find that they not only facilitate tax evasion and corruption in “normal times”, but also absorb resources during financial crises, when most needed.

Source: Journal of International Economics

DOI: 10.1016/j.jinteco.2025.104175

Authors: Silvia Marchesi, Giovanna Marcolongo

Institutions: University of Milano-Bicocca, Bocconi University

Language: English

Topic: Global Financial Crisis and Policies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,300