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Grey ZOnes in Global Finance: the Distorted Geography of Cross Border Investments

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Abstract

Tax avoidance schemes generate artificially complex cross-border financial structures inflatingmeasured international investment stocks in tax havens. Using a standard gravity framework, weestimate that about 40\% of global assets (FDI, portfolio equity and debt) are 'abnormal' -unexplained - stocks. Abnormal stocks are increasing over time and concentrated in a limitednumber of jurisdictions. Six jurisdictions including three European countries are the largestcontributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands.Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away
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Dates and versions

hal-03101473 , version 1 (07-01-2021)

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  • HAL Id : hal-03101473 , version 1

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Vincent Vicard, Guillin Amélie. Grey ZOnes in Global Finance: the Distorted Geography of Cross Border Investments. 2021. ⟨hal-03101473⟩

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