OFFSHORE FINANCIAL CENTRES: PARASITES OR
SYMBIONTS?*
Andrew K. Rose and Mark M. Spiegel
This article analyses the causes and consequences of offshore financial centres (OFCs). While OFCs
are likely to encourage bad behaviour in source countries, they may also have unintended positive
consequences, such as providing competition for the domestic banking sector. We derive and sim-
ulate a model of a home country monopoly bank facing a representative competitive OFC which
offers tax advantages attained by moving assets offshore at a cost that is increasing in distance to the
OFC. Our model predicts that proximity to an OFC is likely to be pro-competitive. We test and
confirm the predictions empirically. OFC proximity is associated with a more competitive domestic
banking system and greater overall financial depth.
Offshore financial centres (OFCs) are jurisdictions that oversee a disproportionate
level of financial activity by non-residents. Financial activity in OFCs is usually domi-
nated by the provision of intermediation services for larger neighbouring countries. In
this article, we ask two distinct questions concerning the causes and consequences of
OFCs. First, why do some countries become OFCs? Second, what are the consequences
of OFCs for their neighbours?1
What makes a country likely to become an offshore financial centre? We approach
this question with both bilateral and multilateral data sets. Using bilateral data from
over 200 countries in the Coordinated Portfolio Investment Survey (CPIS), we examine the
determinants of cross-border asset holdings for 2001 and 2002 using a gravity model.
We confirm these results using a probit model applied to a multilateral cross-section of
over 200 countries for the same time period. Unsurprisingly, tax havens and money
launderers host more assets and are more likely to be OFCs. These results are intuitive;
one attraction of moving assets offshore is the ability to pursue activities that are
prohibited in source countries.
Do OFCs make bad neighbours? One might expect proximity to an OFC to be bad
for the neighbourhood, since OFCs encourage tax evasion and other illegal activities.
However, the presence of nearby offshore financial centres may also have beneficial
effects. Most importantly, the presence of an OFC with an efficient financial sector may
increase the competitiveness of a source country’s banking sector, though this benefit
is tempered by transactions costs. The tradeoff between the positive and negative
externalities of OFCs lies at the heart of our article.
To analyse this tradeoff, we develop a model where OFCs have this benign effect,
even though shifting assets offshore is costly. In our model a home country monopoly
* We thank Gian-Maria Milesi-Ferretti for inspiration, conversations, and data. Jessica Wesley provided
excellent research assistance. For comments, we thank: two anonymous referees, Joshua Aizenman, Sven
Arndt, Michael Dooley, Pierre-Olivier Gourinchas, Galin.
Scanned by CamScannerScanned by CamScannerO .docxkenjordan97598
Scanned by CamScanner
Scanned by CamScanner
O F F S H O R E F I N A N C I A L C E N T R E S : P A R A S I T E S O R
S Y M B I O N T S ? *
Andrew K. Rose and Mark M. Spiegel
This article analyses the causes and consequences of offshore financial centres (OFCs). While OFCs
are likely to encourage bad behaviour in source countries, they may also have unintended positive
consequences, such as providing competition for the domestic banking sector. We derive and sim-
ulate a model of a home country monopoly bank facing a representative competitive OFC which
offers tax advantages attained by moving assets offshore at a cost that is increasing in distance to the
OFC. Our model predicts that proximity to an OFC is likely to be pro-competitive. We test and
confirm the predictions empirically. OFC proximity is associated with a more competitive domestic
banking system and greater overall financial depth.
Offshore financial centres (OFCs) are jurisdictions that oversee a disproportionate
level of financial activity by non-residents. Financial activity in OFCs is usually domi-
nated by the provision of intermediation services for larger neighbouring countries. In
this article, we ask two distinct questions concerning the causes and consequences of
OFCs. First, why do some countries become OFCs? Second, what are the consequences
of OFCs for their neighbours?1
What makes a country likely to become an offshore financial centre? We approach
this question with both bilateral and multilateral data sets. Using bilateral data from
over 200 countries in the Coordinated Portfolio Investment Survey (CPIS), we examine the
determinants of cross-border asset holdings for 2001 and 2002 using a gravity model.
We confirm these results using a probit model applied to a multilateral cross-section of
over 200 countries for the same time period. Unsurprisingly, tax havens and money
launderers host more assets and are more likely to be OFCs. These results are intuitive;
one attraction of moving assets offshore is the ability to pursue activities that are
prohibited in source countries.
Do OFCs make bad neighbours? One might expect proximity to an OFC to be bad
for the neighbourhood, since OFCs encourage tax evasion and other illegal activities.
However, the presence of nearby offshore financial centres may also have beneficial
effects. Most importantly, the presence of an OFC with an efficient financial sector may
increase the competitiveness of a source country’s banking sector, though this benefit
is tempered by transactions costs. The tradeoff between the positive and negative
externalities of OFCs lies at the heart of our article.
To analyse this tradeoff, we develop a model where OFCs have this benign effect,
even though shifting assets offshore is costly. In our model a home country monopoly
* We thank Gian-Maria Milesi-Ferretti for inspiration, conversations, and data. Jessica Wesley provided
excellent research assistance. For comments, we thank: two anony.
Scanned by CamScannerScanned by CamScannerWeek 2.docxkenjordan97598
Scanned by CamScanner
Scanned by CamScanner
Week 2: Project Proposal
Category
Points
%
Description
Content
10
40
Discusses which topic scenario has been chosen and why, and how the topic is important to the study of cultural diversity.
Research Goals and Plan
10
40
Describes what the student expects to find and or what the students would be interested in learning; describes how the student plans to go about his or her research.
Organization and Editing
3
12
Proposal is well written, well organized, and free from errors in spelling, grammar, and punctuation.
Formatting
2
8
Proposal is in correct APA format, with a Title page.
Total
25
100
A quality paper will meet or exceed all of the above requirements.
Week 4: Reference List and Outline
Category
Points
%
Description
Outline and Organization
35
47
Outline lists the main topics the project will cover and incorporates the key elements of the chosen topic scenario; outline is clearly written and wellorganized.
Reference List
30
40
Reference list contains at least four credible sources.
Formatting
10
13
Submission is in correct APA format, with a Title page.
Total
75
100
A quality paper will meet or exceed all of the above requirements.
Week 7: Final Paper
Category
Points
%
Description
Content
105
70.2
Addresses each component of the chosen topic scenario, integrating concrete examples and strategies, and uses information from sources to support points.
Documentation & Formatting
15
10
Follows correct APA format, including a Title page and reference page with at least four credible sources.
Organization & Cohesiveness
10
6.6
Cohesive and well organized, with a clear introduction and a conclusion that summarizes the paper’s key points.
Editing
10
6.6
Uses proper grammar, punctuation, and spelling.
Length
10
6.6
Meets minimum length requirement of six to eight pages of text.
Total
150
100
A quality paper will meet or exceed all of the above requirements.
O F F S H O R E F I N A N C I A L C E N T R E S : P A R A S I T E S O R
S Y M B I O N T S ? *
Andrew K. Rose and Mark M. Spiegel
This article analyses the causes and consequences of offshore financial centres (OFCs). While OFCs
are likely to encourage bad behaviour in source countries, they may also have unintended positive
consequences, such as providing competition for the domestic banking sector. We derive and sim-
ulate a model of a home country monopoly bank facing a representative competitive OFC which
offers tax advantages attained by moving assets offshore at a cost that is increasing in distance to the
OFC. Our model predicts that proximity to an OFC is likely to be pro-competitive. We test and
confirm the predictions empirically. OFC proximity is associated with a more competitive domestic
banking system and greater overall financial depth.
Offshore financial centres (OFCs) are jurisdictions that oversee a disproportionate
level of financial activity by non-residents. Financial activity in OFCs is usually domi-
nated by the .
Illicit financial flows and their impact in developing nationsDr Lendy Spires
Developing countries lost nearly $5.9 trillion over the past decade to illicit financial flows, draining funds for development. Illicit flows include illegally earned money being hidden or transferred abroad, as well as legally earned money being moved through aggressive tax avoidance schemes. Common tactics include mispricing assets in international trade to shift profits to tax havens, round-tripping investments to exploit tax breaks, and hiding ownership through shell companies. These illicit flows significantly reduce developing countries' tax revenues and foreign investment, inhibiting growth, infrastructure investment, and provision of public services. International organizations are working to curb illicit flows through automatic exchange of tax information, public disclosure of beneficial ownership, country-by-country reporting, and enforcing arms
The Offshore Financial Centres - Conceiling the beneficial ownerFrank Erkens
Faced with the threat that the public may lose its confidence in the financial world, the international community has decided to uncover the numerous disguises used by criminals. This two-part series focuses on a number of important disguises, and the initiatives taken to resolve the problem of the concealment of beneficial owners. In the first part, we will look at the Offshore Financial Centres. This two-part series centres around the US legislative proposal HR3886. The aim of this legislative proposal is to facilitate the identification of the beneficial owner. Of course, the question remains whether this aim will be achieved or whether, as it appears now, the problem will simply relocate.
The Panama Papers: What now for Jersey? bakerpartners
The document summarizes the key points from a breakfast briefing on the implications of the Panama Papers leak for Jersey. It discusses what was contained in the Panama Papers documents, including details on Mossack Fonseca's services and prominent individuals identified. It outlines the effects so far, including government resignations and increased pressure on tax havens. It considers what further actions might be expected and debates whether central registries are the solution. Finally, it analyzes the potential risks and responses for Jersey specifically in light of its possible connections mentioned in the documents.
The document discusses several key topics regarding the European banking sector over the last decade. It outlines how the sector has consolidated significantly through mergers and acquisitions, leading to fewer but larger banks and increased concentration. It also examines developments in areas like retail banking, private banking, investment banking, and the effects of technological advances. Regulatory changes in Europe, like deregulation and the single market for financial services, contributed to the restructuring and changes within the European banking industry.
This document discusses several topics related to the European banking sector over the last decade. It describes how the sector has experienced consolidation through mergers and acquisitions, leading to fewer but larger banks and increased concentration. It also addresses developments in retail banking, private banking, investment banking, and the impact of technological advances. Performance in the sector is discussed in relation to efficiency gains from adopting new technologies, though their impact on productivity has been debated.
Fiscal multipliers and foreign holdings of public debt - working paperADEMU_Project
This paper explores the relationship between fiscal multipliers and foreign holdings of public debt. Using data from the US postwar period and a panel of 17 advanced economies, the paper finds that fiscal multipliers are larger when a higher share of public debt is held by foreign residents rather than domestic residents. This is because when debt is held by foreigners, fiscal expansions face weaker crowding-out effects on domestic private consumption and investment. The paper develops a model to explain this relationship and employs various empirical methods to estimate fiscal multipliers conditioned on the foreign share of public debt.
Scanned by CamScannerScanned by CamScannerO .docxkenjordan97598
Scanned by CamScanner
Scanned by CamScanner
O F F S H O R E F I N A N C I A L C E N T R E S : P A R A S I T E S O R
S Y M B I O N T S ? *
Andrew K. Rose and Mark M. Spiegel
This article analyses the causes and consequences of offshore financial centres (OFCs). While OFCs
are likely to encourage bad behaviour in source countries, they may also have unintended positive
consequences, such as providing competition for the domestic banking sector. We derive and sim-
ulate a model of a home country monopoly bank facing a representative competitive OFC which
offers tax advantages attained by moving assets offshore at a cost that is increasing in distance to the
OFC. Our model predicts that proximity to an OFC is likely to be pro-competitive. We test and
confirm the predictions empirically. OFC proximity is associated with a more competitive domestic
banking system and greater overall financial depth.
Offshore financial centres (OFCs) are jurisdictions that oversee a disproportionate
level of financial activity by non-residents. Financial activity in OFCs is usually domi-
nated by the provision of intermediation services for larger neighbouring countries. In
this article, we ask two distinct questions concerning the causes and consequences of
OFCs. First, why do some countries become OFCs? Second, what are the consequences
of OFCs for their neighbours?1
What makes a country likely to become an offshore financial centre? We approach
this question with both bilateral and multilateral data sets. Using bilateral data from
over 200 countries in the Coordinated Portfolio Investment Survey (CPIS), we examine the
determinants of cross-border asset holdings for 2001 and 2002 using a gravity model.
We confirm these results using a probit model applied to a multilateral cross-section of
over 200 countries for the same time period. Unsurprisingly, tax havens and money
launderers host more assets and are more likely to be OFCs. These results are intuitive;
one attraction of moving assets offshore is the ability to pursue activities that are
prohibited in source countries.
Do OFCs make bad neighbours? One might expect proximity to an OFC to be bad
for the neighbourhood, since OFCs encourage tax evasion and other illegal activities.
However, the presence of nearby offshore financial centres may also have beneficial
effects. Most importantly, the presence of an OFC with an efficient financial sector may
increase the competitiveness of a source country’s banking sector, though this benefit
is tempered by transactions costs. The tradeoff between the positive and negative
externalities of OFCs lies at the heart of our article.
To analyse this tradeoff, we develop a model where OFCs have this benign effect,
even though shifting assets offshore is costly. In our model a home country monopoly
* We thank Gian-Maria Milesi-Ferretti for inspiration, conversations, and data. Jessica Wesley provided
excellent research assistance. For comments, we thank: two anony.
Scanned by CamScannerScanned by CamScannerWeek 2.docxkenjordan97598
Scanned by CamScanner
Scanned by CamScanner
Week 2: Project Proposal
Category
Points
%
Description
Content
10
40
Discusses which topic scenario has been chosen and why, and how the topic is important to the study of cultural diversity.
Research Goals and Plan
10
40
Describes what the student expects to find and or what the students would be interested in learning; describes how the student plans to go about his or her research.
Organization and Editing
3
12
Proposal is well written, well organized, and free from errors in spelling, grammar, and punctuation.
Formatting
2
8
Proposal is in correct APA format, with a Title page.
Total
25
100
A quality paper will meet or exceed all of the above requirements.
Week 4: Reference List and Outline
Category
Points
%
Description
Outline and Organization
35
47
Outline lists the main topics the project will cover and incorporates the key elements of the chosen topic scenario; outline is clearly written and wellorganized.
Reference List
30
40
Reference list contains at least four credible sources.
Formatting
10
13
Submission is in correct APA format, with a Title page.
Total
75
100
A quality paper will meet or exceed all of the above requirements.
Week 7: Final Paper
Category
Points
%
Description
Content
105
70.2
Addresses each component of the chosen topic scenario, integrating concrete examples and strategies, and uses information from sources to support points.
Documentation & Formatting
15
10
Follows correct APA format, including a Title page and reference page with at least four credible sources.
Organization & Cohesiveness
10
6.6
Cohesive and well organized, with a clear introduction and a conclusion that summarizes the paper’s key points.
Editing
10
6.6
Uses proper grammar, punctuation, and spelling.
Length
10
6.6
Meets minimum length requirement of six to eight pages of text.
Total
150
100
A quality paper will meet or exceed all of the above requirements.
O F F S H O R E F I N A N C I A L C E N T R E S : P A R A S I T E S O R
S Y M B I O N T S ? *
Andrew K. Rose and Mark M. Spiegel
This article analyses the causes and consequences of offshore financial centres (OFCs). While OFCs
are likely to encourage bad behaviour in source countries, they may also have unintended positive
consequences, such as providing competition for the domestic banking sector. We derive and sim-
ulate a model of a home country monopoly bank facing a representative competitive OFC which
offers tax advantages attained by moving assets offshore at a cost that is increasing in distance to the
OFC. Our model predicts that proximity to an OFC is likely to be pro-competitive. We test and
confirm the predictions empirically. OFC proximity is associated with a more competitive domestic
banking system and greater overall financial depth.
Offshore financial centres (OFCs) are jurisdictions that oversee a disproportionate
level of financial activity by non-residents. Financial activity in OFCs is usually domi-
nated by the .
Illicit financial flows and their impact in developing nationsDr Lendy Spires
Developing countries lost nearly $5.9 trillion over the past decade to illicit financial flows, draining funds for development. Illicit flows include illegally earned money being hidden or transferred abroad, as well as legally earned money being moved through aggressive tax avoidance schemes. Common tactics include mispricing assets in international trade to shift profits to tax havens, round-tripping investments to exploit tax breaks, and hiding ownership through shell companies. These illicit flows significantly reduce developing countries' tax revenues and foreign investment, inhibiting growth, infrastructure investment, and provision of public services. International organizations are working to curb illicit flows through automatic exchange of tax information, public disclosure of beneficial ownership, country-by-country reporting, and enforcing arms
The Offshore Financial Centres - Conceiling the beneficial ownerFrank Erkens
Faced with the threat that the public may lose its confidence in the financial world, the international community has decided to uncover the numerous disguises used by criminals. This two-part series focuses on a number of important disguises, and the initiatives taken to resolve the problem of the concealment of beneficial owners. In the first part, we will look at the Offshore Financial Centres. This two-part series centres around the US legislative proposal HR3886. The aim of this legislative proposal is to facilitate the identification of the beneficial owner. Of course, the question remains whether this aim will be achieved or whether, as it appears now, the problem will simply relocate.
The Panama Papers: What now for Jersey? bakerpartners
The document summarizes the key points from a breakfast briefing on the implications of the Panama Papers leak for Jersey. It discusses what was contained in the Panama Papers documents, including details on Mossack Fonseca's services and prominent individuals identified. It outlines the effects so far, including government resignations and increased pressure on tax havens. It considers what further actions might be expected and debates whether central registries are the solution. Finally, it analyzes the potential risks and responses for Jersey specifically in light of its possible connections mentioned in the documents.
The document discusses several key topics regarding the European banking sector over the last decade. It outlines how the sector has consolidated significantly through mergers and acquisitions, leading to fewer but larger banks and increased concentration. It also examines developments in areas like retail banking, private banking, investment banking, and the effects of technological advances. Regulatory changes in Europe, like deregulation and the single market for financial services, contributed to the restructuring and changes within the European banking industry.
This document discusses several topics related to the European banking sector over the last decade. It describes how the sector has experienced consolidation through mergers and acquisitions, leading to fewer but larger banks and increased concentration. It also addresses developments in retail banking, private banking, investment banking, and the impact of technological advances. Performance in the sector is discussed in relation to efficiency gains from adopting new technologies, though their impact on productivity has been debated.
Fiscal multipliers and foreign holdings of public debt - working paperADEMU_Project
This paper explores the relationship between fiscal multipliers and foreign holdings of public debt. Using data from the US postwar period and a panel of 17 advanced economies, the paper finds that fiscal multipliers are larger when a higher share of public debt is held by foreign residents rather than domestic residents. This is because when debt is held by foreigners, fiscal expansions face weaker crowding-out effects on domestic private consumption and investment. The paper develops a model to explain this relationship and employs various empirical methods to estimate fiscal multipliers conditioned on the foreign share of public debt.
Regulatory Arbitrage & International Bank FlowsAbhishek Chaube
1) The study finds evidence that banks transfer funds to markets with fewer banking regulations through regulatory arbitrage.
2) Regression analyses show that bank flows are positively related to restrictions and regulations in source countries, and negatively related to restrictions and regulations in recipient countries.
3) Specifically, bank capital flows from countries with stringent regulations, strong disclosure requirements, and independent supervision to countries with less restrictive regulations, weaker disclosure standards, and more lenient supervision.
Performance of local vs foreign managers ottenbfmresearch
This study examines the performance of US equity funds versus UK equity funds that also invest in the US equity market from 1990 to 2000. Using a single-factor CAPM model, the authors find an insignificant performance difference between US and UK funds overall. However, when separating funds by size, they find US large cap funds have significantly lower market risk than UK peers, while US small cap funds have significantly higher market risk. Applying a multi-factor model controlling for size, value, and momentum factors, the authors continue to find no significant performance differences between local US and foreign UK funds.
International remittances the next big thing in mobile payments sep-2012Peerasak C.
The document discusses the potential for mobile payments to play a larger role in international remittances, which totaled over $483 billion in 2011. While the size of the market is attractive, mobile payments have so far played a modest role due to a lack of market concentration across many corridors, security concerns around money laundering, and established alternatives. Barriers include the need to negotiate regulations between many different countries and concerns that criminal networks may exploit mobile payment systems.
This document discusses illicit financial flows from developing countries and OECD responses to combat them. It analyzes OECD performance in combating money laundering, tax evasion, bribery, and recovering stolen assets. Key findings include weaknesses in OECD anti-money laundering regulations, beneficial ownership transparency, and developing country capacity for tax information exchange and transfer pricing oversight. The document recommends strengthening these areas and international cooperation to more effectively address illicit financial flows.
The document provides an overview of transfer pricing in Africa. It notes that as Africa's economy and multinational corporate investment continues to grow, transfer pricing is receiving increased focus in the region. While many African nations have adopted transfer pricing regulations based on the arm's length standard, concerns around adequate taxation of natural resources continues to influence legislation. International organizations like the OECD, UN, and ATAF support consistent transfer pricing standards to increase investment while protecting tax bases.
This document provides an analysis of the financial risks associated with a £55 million investment by a UK company in Ruritania, an Eastern European country. It identifies three main currency exposures: transaction, translation, and economic. Transaction exposure from foreign supplier payments can be reduced through hedging strategies like forward contracts. Translation exposure from foreign currency assets and liabilities on the balance sheet can also be hedged using forward contracts. Economic exposure, which impacts future cash flows, is more difficult to hedge against and the level of risk for the UK company is uncertain given its lack of international experience. Overall, the document recommends hedging strategies to manage various currency risks from investing such a large sum in Ruritania's floating
The document discusses factors that influence customer retention towards room services by analyzing the case of Swiss Inn Sungai Petani hotel in Malaysia. It describes the various departments and facilities at Swiss Inn Sungai Petani, including 101 rooms, 21 suite rooms, a health spa with sauna, tennis courts, a gym, and 12 function rooms. The quality of services delivered and ability to meet customer expectations are identified as critical for customer satisfaction and retention in the hotel services industry.
This document summarizes a panel discussion on the role of reporting in transitioning to a sustainable economy. The panel consisted of experts from accounting, business, and ethics organizations.
The discussion focused on the progress made by the integrated reporting movement in engaging companies, investors, and other stakeholders. However, more needs to be done to engage political leaders and demonstrate how sustainability reporting relates to financial stability and long-term economic growth. Adopting global reporting standards will require political will from international groups like the G20.
The panel suggested developing a narrative around how short-termism, valuation issues, and lack of long-term risk information contribute to market volatility. This could help integrated reporting gain priority at influential bodies like
Performance and character of swedish funds dahlquistbfmresearch
This document analyzes the performance and characteristics of Swedish mutual funds from 1993 to 1997. It finds that small equity funds and funds with lower fees tended to perform better, while large equity funds may have been too large to trade aggressively. Actively managed equity funds outperformed passively managed funds. Money market funds showed some persistence in performance, but other fund categories did not. The study uses various statistical methods to establish robust relationships between estimated fund performance and attributes like size, fees, trading activity, and past returns.
This document provides an outline for Chapter 19 of a textbook on multinational finance. The chapter discusses the multinational finance function and how companies raise funds globally. It covers external sources like global debt and equity markets as well as internal sources through intercompany transfers. The chapter also explores foreign exchange risk management, international capital budgeting, taxation issues for multinational enterprises, and how companies finance imports and exports. An opening case study describes how Nu Skin Enterprises manages currency risk across its operations in many countries.
Eden-ALS-MAKING-WORK-21ST-CENTURY-July-2014LORRAINE EDEN
This summary provides the key points from the document in 3 sentences:
The document discusses the arm's length standard (ALS) which is used to determine corporate tax payments between related entities in different countries. It acknowledges criticisms of the ALS and focuses on recommendations to improve the current system, including reducing incentives for abusive transfer pricing by establishing a simpler international tax regime. The first problem of abusive transfer pricing is seen as a design problem of the international tax regime, not a transfer pricing problem, and solutions involve strengthening anti-abuse rules and transparency.
International tax cooperation for developmentDr Lendy Spires
The document discusses several key issues regarding international tax cooperation for development:
1) Taxation is important for developing countries to mobilize domestic resources, but many have lower tax revenues than developed countries due to issues like illicit financial flows.
2) International tax rules and norms influence countries' ability to tax, and the UN model convention preserves more taxing rights for developing countries than the OECD model.
3) Transfer pricing and base erosion profit shifting allow multinational corporations to shift profits between countries and avoid taxation, depriving developing countries of tax revenues.
The document analyzes whether countries that claim to have floating exchange rates are actually allowing their currencies to float freely. It finds that in many cases, countries labeled as floating or managed floating are in fact intervening significantly to limit exchange rate movements through actions such as foreign exchange purchases and interest rate adjustments. This "fear of floating" is evidenced by exchange rates, reserves, and interest rates fluctuating within narrow bands much like in pegged regimes, despite labels suggesting greater flexibility. The authors develop an exchange rate flexibility index to more accurately capture the degree of intervention across different exchange rate arrangements.
Impact analysis of interest rate on the net assets of multinational businesse...Alexander Decker
This document summarizes a research study that examined the impact of interest rates on the net assets of multinational businesses in Nigeria from 1995 to 2010. A regression model was used to analyze the relationship between net asset value index and interest rates based on financial data from 7 randomly sampled multinational companies. The regression analysis showed that increases in interest rates resulted in reductions in net assets. Therefore, interest rates provide important information for multinational companies about profitability and maintaining the right debt-equity mix to remain competitive.
The document discusses payment system infrastructure for international remittance services. It focuses on improving infrastructure to increase efficiency of remittance services, per the CPSS-World Bank General Principles. There is an asymmetry between well-developed payment systems in major sending countries versus less developed systems in many receiving countries. The document recommends reforms to facilitate development of cross-border payment mechanisms and enable efficient, secure remittance payments between countries.
This document summarizes trends in the wealth management industry from 2010-2014. It finds that the number and wealth of high-net-worth individuals will continue growing significantly in coming years, especially in Asia, the Middle East, and Latin America. It also reports that new clients in this decade will increasingly demand international investment strategies and holistic family advisory services. The document recommends that financial professionals develop well-rounded international experience and perspectives to best serve the needs of these new high-net-worth clients.
In recent years, there have been several high-profile leaks of documents related to the offshore financial industry, such as the Pandora Papers released last year. Some of the data contained in the leaked documents have now been made public. In this brief, we discuss the advantages and pitfalls of using these data for economic analysis. We show that despite some caveats, there are patterns in these data that can shed light on a secretive industry. For instance, the number of offshore entities linked to a country increases significantly when that country experiences a change in political leadership. By contrast, financial sanctions on a given country result in a reduction in the number of established offshore entities. In the immediate aftermath of the financial crisis, many countries signed bilateral treaties with tax havens in order to promote transparency. Our analysis of the leaked data shows that the overwhelming majority of offshore entities are not governed by these treaties.
This document summarizes a journal article that investigates constraints on small and medium enterprises (SMEs) accessing bank finance in Cote d'Ivoire. It finds that information asymmetry and inadequate collateral are two major demand-side constraints. SMEs in Cote d'Ivoire struggle to provide adequate financial statements and records to banks, and many lack sufficient collateral to secure loans. The document also notes supply-side constraints, including a low level of foreign bank participation and poor economic freedom in Cote d'Ivoire.
Remittances, or money transferred by foreign workers to their home countries, have grown significantly in size and importance. In 2005, global remittances totaled over $232 billion, with developing countries receiving about two-thirds of that amount. The top three recipient countries were India, China, and Mexico, receiving around a quarter of global remittances. However, when viewed as a percentage of GDP, smaller, poorer countries tend to rely more heavily on remittances. Remittances have also become a more stable and important source of capital than foreign direct investment or official development assistance. Improving remittance processes through new technologies could help further economic development in receiving countries.
This modules animation What Is Communication provides background .docxhopeaustin33688
This module's animation What Is Communication? provides background for this assignment.
The six characteristics from which you should choose are:
Involves interdependent individuals
Is inherently rational
Exists on a continuum
Features verbal and nonverbal messages
Exists in varied forms
Varies in effectiveness
Write a 1-page essay that explains 2 of the 6 characteristics of interpersonal communication and illustrate how each one is demonstrated in your communication style. Include at least one quotation from your research. Cite your source in APA format.
.
▪Nursing Theory PowerPoint Presentation.This is a group project .docxhopeaustin33688
▪
Nursing Theory PowerPoint Presentation.
This is a group project this is my part…
Lydia Hall The 3 Cs Nursing Theory. (im doing the CORE, and the strengths and weakness of the whole theory)
WIKI Project Guideline:
1
4 to 6 slides plus a reference slide on the nursing theory
(THE CORE & the strengths and the weakness)
2 responsible to
create 2-3 voice-over PPT (FEMALE VOICE)
slides on their designated topic area.
3Please note that
APA
format is required within the PowerPoint presentation. Reference slides are required at the end of the presentation.
This assignment will be graded according to the following rubric:
Criteria
Points
WIKI content 8
APA in-text citation and reference page 4
Multimedia Inclusion 3
Total
15
.
More Related Content
Similar to OFFSHORE FINANCIAL CENTRES PARASITES ORSYMBIONTSAndre.docx
Regulatory Arbitrage & International Bank FlowsAbhishek Chaube
1) The study finds evidence that banks transfer funds to markets with fewer banking regulations through regulatory arbitrage.
2) Regression analyses show that bank flows are positively related to restrictions and regulations in source countries, and negatively related to restrictions and regulations in recipient countries.
3) Specifically, bank capital flows from countries with stringent regulations, strong disclosure requirements, and independent supervision to countries with less restrictive regulations, weaker disclosure standards, and more lenient supervision.
Performance of local vs foreign managers ottenbfmresearch
This study examines the performance of US equity funds versus UK equity funds that also invest in the US equity market from 1990 to 2000. Using a single-factor CAPM model, the authors find an insignificant performance difference between US and UK funds overall. However, when separating funds by size, they find US large cap funds have significantly lower market risk than UK peers, while US small cap funds have significantly higher market risk. Applying a multi-factor model controlling for size, value, and momentum factors, the authors continue to find no significant performance differences between local US and foreign UK funds.
International remittances the next big thing in mobile payments sep-2012Peerasak C.
The document discusses the potential for mobile payments to play a larger role in international remittances, which totaled over $483 billion in 2011. While the size of the market is attractive, mobile payments have so far played a modest role due to a lack of market concentration across many corridors, security concerns around money laundering, and established alternatives. Barriers include the need to negotiate regulations between many different countries and concerns that criminal networks may exploit mobile payment systems.
This document discusses illicit financial flows from developing countries and OECD responses to combat them. It analyzes OECD performance in combating money laundering, tax evasion, bribery, and recovering stolen assets. Key findings include weaknesses in OECD anti-money laundering regulations, beneficial ownership transparency, and developing country capacity for tax information exchange and transfer pricing oversight. The document recommends strengthening these areas and international cooperation to more effectively address illicit financial flows.
The document provides an overview of transfer pricing in Africa. It notes that as Africa's economy and multinational corporate investment continues to grow, transfer pricing is receiving increased focus in the region. While many African nations have adopted transfer pricing regulations based on the arm's length standard, concerns around adequate taxation of natural resources continues to influence legislation. International organizations like the OECD, UN, and ATAF support consistent transfer pricing standards to increase investment while protecting tax bases.
This document provides an analysis of the financial risks associated with a £55 million investment by a UK company in Ruritania, an Eastern European country. It identifies three main currency exposures: transaction, translation, and economic. Transaction exposure from foreign supplier payments can be reduced through hedging strategies like forward contracts. Translation exposure from foreign currency assets and liabilities on the balance sheet can also be hedged using forward contracts. Economic exposure, which impacts future cash flows, is more difficult to hedge against and the level of risk for the UK company is uncertain given its lack of international experience. Overall, the document recommends hedging strategies to manage various currency risks from investing such a large sum in Ruritania's floating
The document discusses factors that influence customer retention towards room services by analyzing the case of Swiss Inn Sungai Petani hotel in Malaysia. It describes the various departments and facilities at Swiss Inn Sungai Petani, including 101 rooms, 21 suite rooms, a health spa with sauna, tennis courts, a gym, and 12 function rooms. The quality of services delivered and ability to meet customer expectations are identified as critical for customer satisfaction and retention in the hotel services industry.
This document summarizes a panel discussion on the role of reporting in transitioning to a sustainable economy. The panel consisted of experts from accounting, business, and ethics organizations.
The discussion focused on the progress made by the integrated reporting movement in engaging companies, investors, and other stakeholders. However, more needs to be done to engage political leaders and demonstrate how sustainability reporting relates to financial stability and long-term economic growth. Adopting global reporting standards will require political will from international groups like the G20.
The panel suggested developing a narrative around how short-termism, valuation issues, and lack of long-term risk information contribute to market volatility. This could help integrated reporting gain priority at influential bodies like
Performance and character of swedish funds dahlquistbfmresearch
This document analyzes the performance and characteristics of Swedish mutual funds from 1993 to 1997. It finds that small equity funds and funds with lower fees tended to perform better, while large equity funds may have been too large to trade aggressively. Actively managed equity funds outperformed passively managed funds. Money market funds showed some persistence in performance, but other fund categories did not. The study uses various statistical methods to establish robust relationships between estimated fund performance and attributes like size, fees, trading activity, and past returns.
This document provides an outline for Chapter 19 of a textbook on multinational finance. The chapter discusses the multinational finance function and how companies raise funds globally. It covers external sources like global debt and equity markets as well as internal sources through intercompany transfers. The chapter also explores foreign exchange risk management, international capital budgeting, taxation issues for multinational enterprises, and how companies finance imports and exports. An opening case study describes how Nu Skin Enterprises manages currency risk across its operations in many countries.
Eden-ALS-MAKING-WORK-21ST-CENTURY-July-2014LORRAINE EDEN
This summary provides the key points from the document in 3 sentences:
The document discusses the arm's length standard (ALS) which is used to determine corporate tax payments between related entities in different countries. It acknowledges criticisms of the ALS and focuses on recommendations to improve the current system, including reducing incentives for abusive transfer pricing by establishing a simpler international tax regime. The first problem of abusive transfer pricing is seen as a design problem of the international tax regime, not a transfer pricing problem, and solutions involve strengthening anti-abuse rules and transparency.
International tax cooperation for developmentDr Lendy Spires
The document discusses several key issues regarding international tax cooperation for development:
1) Taxation is important for developing countries to mobilize domestic resources, but many have lower tax revenues than developed countries due to issues like illicit financial flows.
2) International tax rules and norms influence countries' ability to tax, and the UN model convention preserves more taxing rights for developing countries than the OECD model.
3) Transfer pricing and base erosion profit shifting allow multinational corporations to shift profits between countries and avoid taxation, depriving developing countries of tax revenues.
The document analyzes whether countries that claim to have floating exchange rates are actually allowing their currencies to float freely. It finds that in many cases, countries labeled as floating or managed floating are in fact intervening significantly to limit exchange rate movements through actions such as foreign exchange purchases and interest rate adjustments. This "fear of floating" is evidenced by exchange rates, reserves, and interest rates fluctuating within narrow bands much like in pegged regimes, despite labels suggesting greater flexibility. The authors develop an exchange rate flexibility index to more accurately capture the degree of intervention across different exchange rate arrangements.
Impact analysis of interest rate on the net assets of multinational businesse...Alexander Decker
This document summarizes a research study that examined the impact of interest rates on the net assets of multinational businesses in Nigeria from 1995 to 2010. A regression model was used to analyze the relationship between net asset value index and interest rates based on financial data from 7 randomly sampled multinational companies. The regression analysis showed that increases in interest rates resulted in reductions in net assets. Therefore, interest rates provide important information for multinational companies about profitability and maintaining the right debt-equity mix to remain competitive.
The document discusses payment system infrastructure for international remittance services. It focuses on improving infrastructure to increase efficiency of remittance services, per the CPSS-World Bank General Principles. There is an asymmetry between well-developed payment systems in major sending countries versus less developed systems in many receiving countries. The document recommends reforms to facilitate development of cross-border payment mechanisms and enable efficient, secure remittance payments between countries.
This document summarizes trends in the wealth management industry from 2010-2014. It finds that the number and wealth of high-net-worth individuals will continue growing significantly in coming years, especially in Asia, the Middle East, and Latin America. It also reports that new clients in this decade will increasingly demand international investment strategies and holistic family advisory services. The document recommends that financial professionals develop well-rounded international experience and perspectives to best serve the needs of these new high-net-worth clients.
In recent years, there have been several high-profile leaks of documents related to the offshore financial industry, such as the Pandora Papers released last year. Some of the data contained in the leaked documents have now been made public. In this brief, we discuss the advantages and pitfalls of using these data for economic analysis. We show that despite some caveats, there are patterns in these data that can shed light on a secretive industry. For instance, the number of offshore entities linked to a country increases significantly when that country experiences a change in political leadership. By contrast, financial sanctions on a given country result in a reduction in the number of established offshore entities. In the immediate aftermath of the financial crisis, many countries signed bilateral treaties with tax havens in order to promote transparency. Our analysis of the leaked data shows that the overwhelming majority of offshore entities are not governed by these treaties.
This document summarizes a journal article that investigates constraints on small and medium enterprises (SMEs) accessing bank finance in Cote d'Ivoire. It finds that information asymmetry and inadequate collateral are two major demand-side constraints. SMEs in Cote d'Ivoire struggle to provide adequate financial statements and records to banks, and many lack sufficient collateral to secure loans. The document also notes supply-side constraints, including a low level of foreign bank participation and poor economic freedom in Cote d'Ivoire.
Remittances, or money transferred by foreign workers to their home countries, have grown significantly in size and importance. In 2005, global remittances totaled over $232 billion, with developing countries receiving about two-thirds of that amount. The top three recipient countries were India, China, and Mexico, receiving around a quarter of global remittances. However, when viewed as a percentage of GDP, smaller, poorer countries tend to rely more heavily on remittances. Remittances have also become a more stable and important source of capital than foreign direct investment or official development assistance. Improving remittance processes through new technologies could help further economic development in receiving countries.
Similar to OFFSHORE FINANCIAL CENTRES PARASITES ORSYMBIONTSAndre.docx (20)
This modules animation What Is Communication provides background .docxhopeaustin33688
This module's animation What Is Communication? provides background for this assignment.
The six characteristics from which you should choose are:
Involves interdependent individuals
Is inherently rational
Exists on a continuum
Features verbal and nonverbal messages
Exists in varied forms
Varies in effectiveness
Write a 1-page essay that explains 2 of the 6 characteristics of interpersonal communication and illustrate how each one is demonstrated in your communication style. Include at least one quotation from your research. Cite your source in APA format.
.
▪Nursing Theory PowerPoint Presentation.This is a group project .docxhopeaustin33688
▪
Nursing Theory PowerPoint Presentation.
This is a group project this is my part…
Lydia Hall The 3 Cs Nursing Theory. (im doing the CORE, and the strengths and weakness of the whole theory)
WIKI Project Guideline:
1
4 to 6 slides plus a reference slide on the nursing theory
(THE CORE & the strengths and the weakness)
2 responsible to
create 2-3 voice-over PPT (FEMALE VOICE)
slides on their designated topic area.
3Please note that
APA
format is required within the PowerPoint presentation. Reference slides are required at the end of the presentation.
This assignment will be graded according to the following rubric:
Criteria
Points
WIKI content 8
APA in-text citation and reference page 4
Multimedia Inclusion 3
Total
15
.
••You are required to write a story; explaining and analyzing .docxhopeaustin33688
•
•
You are required to write a story;
explaining and analyzing
how a certain independent variable ( at the individual, group or organization levels) affects a
dependent
variable (
behaviour
or attitude),
•
You will freely select your story from “ life” : from college, home, neighborhood, a book , a video/ movie, TV…etc. as long as the
story has two clear dependent and independent variables.
•
You will finish with
a conclusion
that lists
both variables
and their
relationship (cause and effect).
.
•Required to read American Mashup A Popular Culture Reader. Ed. A.docxhopeaustin33688
•Required to read American Mashup: A Popular Culture Reader. Ed. Aaron Michael Morales. Boston: Pearson, 2012.
After reading Richard Willig’s “ ‘CSI Effect’ Has Juries Wanting More Evidence” in
American Mashup
on pages 204-210. Consider the types of sources Willig uses to support his main claims. please present at least four (4) specific examples of Willig’s sources. For each source, please identify what that person’s professional ability is and explain how that person’s position of authority helps Willig build his own credibility with readers.
.
• ntercultural Activity Presentation Final SubmissionResourc.docxhopeaustin33688
•
ntercultural
Activity Presentation Final Submission
Resources
•
Intercultural Activity Presentation Final Submission Scoring Guide
.
•
Writing Feedback Tool
.
•
APA Style and Format
.
•
Using Adobe Connect
.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
•
Competency 3:
Demonstrate knowledge, skills, and attitudes to increase intercultural competence.
•
Compare differing cultures.
•
Discuss the potential impact cultural differences have on communication efforts.
•
Competency 4:
Analyze how nonverbal communication (body language) influences intercultural communication.
•
Analyze how nonverbal communication affects intercultural communication.
•
Competency 5:
Communicate effectively in a variety of formats and contexts.
•
Integrate cross-cultural experiences with course material.
•
Write coherently to support a central idea in appropriate format with correct grammar, usage, and mechanics.
Instructions
This is the second part of your course project. For this assignment, create a 5–7 minute Adobe Connect video presentation with a visual component (PowerPoint) in which you narrate and describe an intercultural activity and experience. Complete the following for your presentation:
•
Engage in an intercultural activity or activities with a culture other than your own. You may focus on the same culture you investigated for your Unit 9 paper or choose one that is new to you; however, you must choose a different culture than the one from whom you interviewed someone in Unit 5. Some suggestions for activities to engage in include:
•
Eating at an ethnic restaurant.
•
Visiting a courthouse, jail, military installation, school, retirement home, and other ethnically-diverse institution.
•
Visiting a part of town that is culturally different.
•
Visiting or attending a service of another world religion.
•
Attending a celebration or an ethnically diverse craft fair.
•
Going to a shop that is associated with a particular ethnic group.
•
Visiting a school that teaches ESL (English as a Second Language) or ELL (English Language Learners).
•
Visiting an international student organization at a college or university.
•
Visiting or socializing with people from other cultures.
•
To add perspective and context to your presentation, gather resources such as informal interviews with people from the respective culture, corresponding text readings and articles, Web sites, and media presentations.
•
In your presentation, specifically address the following, using examples and illustrations from your intercultural experience(s) and the resources you collected:
•
Compare the culture you engaged in with your own.
•
Discuss the potential impact cultural differences have on communication.
•
Analyze how nonverbal communication affects intercultural communication.
•
Summarize your thoughts, questions, and viewpoints regarding your experience.
•
.
•Read Chapter 15 from your textbookEthical Controversy Ident.docxhopeaustin33688
•Read Chapter 15 from your textbook
Ethical Controversy
Identify a current ethical controversy that you want to learn more about in business, media, technology, medicine, or bioethics. Write a
three-page analysis
on the major sides in the controversy. In your analysis paper, you need to:
Define the issue and include the following details:
People involved
Field (business, media, technology, medicine, or bioethics)
Purpose
Time period
Discuss the major positions being taken in the debate.
Conclude with your own reflections and opinions on the subject.
Submission Requirements:
Write the paper in APA format including introduction, body, and conclusion.
Add the following sections in APA format:
Cover Page
Header
Page Numbers
References Page
Use 12-point Arial font and double space.
.
· ResearchWorks Cited Page (minimum of 5 reputable resources.docxhopeaustin33688
·
Research/Works Cited Page (minimum of 5 reputable resources And 5 Pages or 1400 words )
:
I need someone to write my research paper with minimum of 5 reputable reseources and 5 pages or 1400 words . And the the research topic is
Gay Issues.
Research
Clearly defined academic research
:
Did your display/project provide Theory, Data, Studies, Organizations,
Solution
s, Forms of Activism and/or Awareness?
Organization
is your information presented in a way that is well organized and coherent? When you verbally share what you know do you demonstrate an educated knowledge of the topic?
Time
did you put in time for planning, developing your project and to educate the class?
On the attachment I have attached my Presentation about
Gay Issues and My old work of writing so that you can write with same level of writing.
Gay Issues
.
‘The Other Side of Immigration’ Questions1. What does one spea.docxhopeaustin33688
‘
The Other Side of Immigration’ Questions
1. What does one speaker in the film mean by migration is not the problem? Do most Mexican immigrants want to stay in the US?
2. Describe how undocumented immigrants create a fantasy for those Mexicans planning to immigrate.
3. How does NAFTA (North American Free Trade Agreement) play a part in the rural Mexicans’ inability to make a living? Be specific.
4. What is the significance of government not providing subsidies or revealing funding opportunities to the agricultural/pastoral communities?
5. Name two solutions to reducing undocumented immigration that were mentioned in the film. How would they work?
From the movie '
The Other Side of Immigration'
.
•Topic What is an ethical leader and how do ethical leaders differ .docxhopeaustin33688
•Topic: What is an ethical leader and how do ethical leaders differ from other leaders? What are the factors that promote or hinder the development of ethical leadership in organisations (e.g., personal characteristics of leaders and what characteristics of a leader‘s environment)?
• 2500 words (+/- 10%) in essay format
•Requirements: MINIMUM of 8 peer reviewed academic journal articles
–Text book or reference books are additional references
–General websites/blogs , newpapers, magazines are not acceptable references
•Submission method: Upload a soft copy of a Microsoft Word Document ( .doc or .docx format) to Turnitin on Moodle
•Correct Harvard Anglia referencing is important
.
·Term Paper International TerrorismDue Week 10 and worth .docxhopeaustin33688
·
Term Paper: International Terrorism
Due Week 10 and worth 200 points
Choose an international terrorist group from the following list, and use the Internet or Strayer databases to research the origin, purpose, and effects on the U.S. or targeted countries.
·
Hezbollah
·
HAMAS
·
Al Qaeda (AQ)
·
Al-Shabaab
·
Haqqani Network (HQN)
Write a ten to fifteen (10-15) page paper in which you:
6.
Provide a brief description of the group, and summarize its origins.
7.
Explain the group’s major motivation(s) (beliefs or causes), and / or its justification for engaging in terrorism.
8.
Describe the group’s major sources of both financial and non-financial support.
9.
Evaluate the importance of the group’s use of media to aid in its terrorist activities. Indicate, at a minimum, the group’s purpose for using the media, the image being portrayed, and the preferred methods of communication.
10.
Determine whether or not the group has a legitimate complaint or demand. Defend your response.
11.
Determine whether or not the group and its activities are of importance to the U.S., and explain the key reasons that they are or are not significant.
12.
Analyze the response of the U.S. to the group or its activities, regardless of whether or not either the group or its activities directly threaten or target the U.S. Determine whether or not that response has been effective. Support your answer with examples of such effectiveness—or the lack thereof.
13.
Suggest the major changes you would make geared toward increasing the efficiency of the U.S.’s response to the group. Justify your response.
14.
Use at least five (5) quality resources in this assignment
And
·
Assignment 5: Senior Seminar Project
Due Week 10 and worth 200 points
In Week 1, you chose a topic area and problem or challenge within that area. Throughout this course, you have researched the dynamics of the problem. The final piece of your project is to develop a viable solution that considers resources, policy, stakeholders, organizational readiness, administrative structures and other internal and external factors, as applicable. Using the papers you have written throughout this course, consolidate your findings into a succinct project.
Write a ten (10) page paper that as a minimum, your project should include:
1.
Identify the topical area (e.g., local police department, community jail, border patrol)
2.
Define a problem or challenge within your topical area that you understand in some depth or have an interest in (examples include high crime rate, poor morale, high levels of violence or recidivism, high number of civilian complaints of harassment, inadequate equipment). Outline the context of the problem or challenge, including the history and any policy decisions that have contributed to the situation.
3.
Describe how internal or external stakeholders have influenced the situation in a positive or negative way. How will you consider stakeholders in your so.
•Prepare a 4-5 page draft Code of Ethics paper sharing the following.docxhopeaustin33688
•Prepare a 4-5 page draft Code of Ethics paper sharing the following:
1) your world view; how you see good and bad, right and wrong, and how you respond to issues. Examine human resources management and
2) share your organization’s core values or principles.
Comment
3) on the validity of those values (are they consistent?).
4) How does everything you shared (#1, 2, 3) impact HR decisions in the workplace? Comment on how you see truth?
Is there such a thing as absolute truth? If so, what is it?
I want her on Wednesday morning at 10
.
·Sketch the context for, define, and tell the significanceafter.docxhopeaustin33688
·
Sketch the context for, define, and tell the significance/after-effect of each, in terms of late-19th & early-20th-century American history & culture: from Sinclair book (The Jungle)
200 word:
1-
1-
National Labor Relations Act (1935) & Fair Labor Standards Act (1938)
·
give the context for, define, and tell the significance/after-effect of each of the following, in terms of 20th-century US culture/history: from Englehardt book (The End of Victory Culture)
200 word:
1-1-
anti-war protests (1967-71) and the "counter-culture"
2-
2-
Vietnam Veterans Memorial (dedicated 1982) [not covered in book; see
http://virtualwall.org/
]
3-
3-
"Authorization of Use of Military Force against Terrorists" Resolution (Sept. 14, 2001)
·
Essays : 250 to 300 word please
choose one of these as you like:
1.
Why was Socialism considered a "radical" ideology and why didn't it flourish in early 20th century America?
2.
In what ways was the Progressive Era (1906-20) truly "progressive" or not; and the "New Deal" (1933-38) really "new" or not, especially in regards to the health, safety and daily lives of U.S. workers and consumers?
.
• Each thread is 650 words• Each thread and reply references at le.docxhopeaustin33688
The document outlines requirements for discussion threads, including using at least 3 peer-reviewed sources and 1 biblical source per thread or reply, citing all sources in APA format, and using proper spelling, grammar, complete, clear, and concise sentences. It then asks what research should be done to determine if Pepsi's new "Live For Now" global branding campaign, which was launched after extensive prior research, is resonating with worldwide audiences.
ØFind a Food borne epidemicIllness that occurred in the U.S. in.docxhopeaustin33688
Ø
Find a Food borne epidemic/Illness that occurred in the U.S. in the last 5 years
Ø
Describe what caused it, how it happened, and how it could have been prevented
Ø
What steps were taken to rectify the situation, both short term and long term
1-2 pages
.
Organizational BehaviorDisney Animation - John LasseterThe case focu.docxhopeaustin33688
Organizational BehaviorDisney Animation - John LasseterThe case focuses on John Lasseter, who currently is the creative head of Disney Animation Studios and Pixar Animation Studios, both of which are owned by The Walt Disney Company. The case chronicles Lasseter’s interests in animation from a young age, the relationship he developed with the Disney organization, his developing interest in computer-animation and consequent demise at Disney Studios, his subsequent award-winning success with computer animation at Pixar Studios, and his recent ascension to creative head of Disney’s Animation Studio as part of the Pixar-Disney merger.The case provides a marvelous illustration of the many types of interpersonal power ¾ reward, coercive, legitimate, referent, and expert that exist within an organization. The case also shows how power can be used to promote the well-being of the organization and its members or to benefit specific people’s interests at the expense of others’ interests. Herein, the two faces of power positive and negative come into play. Another linkage between the chapter material and the case occurs in the form of concerns about the ethical versus unethical use of power. Finally, the case can be used to explore the concepts of organizational politics and political behavior in organizations. Organizational politics often has a negative connotation, and some of the case facts lend themselves to reinforcing this negative connotation.Power and Politics in the Fall and Rise of John LasseterJohn Lasseter grew up in a family heavily involved in artistic expression. Lasseter was drawn to cartoons as a youngster. As a freshman in high school he read a book entitled The Art of Animation. The book, about the making of the Disney animated film Sleeping Beauty, proved to be a revelation for Lasseter. He discovered that people could earn a living by developing cartoons. He started writing letters to The Walt Disney Company Studios regarding his interest in creating cartoons. Studio representatives, who corresponded with Lasseter many times, told him to get a great art education, after which they would teach him animation.When Disney started a Character Animation Program at the California Institute of Arts film school, Lasseter enrolled in the program after encouragement from the studio. Classes were taught by extremely talented Disney animators who also shared stories about working with Walt Disney himself. During summer breaks, jobs at Disneyland further fueled Lasseter’s passion for working as an animator for Disney Studios. Full of excitement, Lasseter joined the Disney animation staff in 1979 after graduation. However, he soon met with disappointment.According to Lasseter, “[t]he animation studio wasn’t being run by these great Disney artists like our teachers at Cal Arts, but by lesser artists and businesspeople who rose through attrition as the grand old men retired.” Lasseter was told, “[y]ou put in your time for 20 years and do what you’r.
Organizational Behavior Case Study on LeadershipName Tan Yee .docxhopeaustin33688
Organizational Behavior Case Study on Leadership
Name: Tan Yee Li Fiona
Student ID: S3447594
Course: RMIT Business (Management)
Leadership, ethics and organizational failure in a post-colonial context: a case study of genocide in Rwanda.
Introduction
Groups, teams and states are major characteristics of organizational life. It is believed that majority of the organization’s practices need a lot of coordination through working as a team and a group.The leadership of an organization is important in terms of the development of the goals and objectives. Leaders within an organization are responsible for developing the goals and objectives of the organization. In most cases, the success of an organization is usually attributed to the leaders of the organization. The genocide in Rwanda was instigated by the hostility between the Hutu and Tutsi as a result of polarization of the two ethnic groups by the colonial era. The colonization process favored one group over the other. It is believed that the leadership of Rwanda at the time played a major role. Leadership in every country plays a major role in the unity of the nation and in fostering peace and co-existence between different ethnic groups. Therefore the leadership of Rwanda at the time failed to quell the existence of animosity between the Hutu and the Tutsi leading to the experience of genocide that led to mass killings. The paper aims at discussing leadership, ethics and organizational failure in a post-colonial context with a case study of genocide in Rwanda. Main emphasis is laid on organizational failure that instigated the genocide and in particular the correlation between the key leaders and geo-political relations (Scott, 1998).
Leadership traits and concepts
Leadership is considered as the ability to influence the followers towards the achievement of set goals and objectives. Leadership is closely related to management which is aimed at ensuring compliance from the organizational members. The trait theory of leadership is important in terms of defining leadership. The characteristics of the leader can be used for the determination of their leadership styles. According to the behavioral theories of leadership, the specific behaviors of the leaders differentiate the leaders from the non leaders. According to the traits theory of leadership, social, physical, personality or intellectual traits can be used for the purpose of differentiating the leaders from the non leaders. According to the theory, the leader is also supposed to be qualified and open. The contingency theory on the other hand analyzes the environment in which the leader operates. Situational leadership theory examines the ability of the followers to readily accept the instructions of the leaders. There are also various styles of leadership and it plays an important role in determining the potential of the leaders. The charismatic leaders usually portray unconventional behaviors and usually understand. On the other.
The document is an organizational assessment worksheet that examines different aspects of an organization. It is divided into several categories:
Organizational Profile - Provides a snapshot of the organization including its services, size, key challenges.
Leadership - Examines the organization's leadership in areas like values, direction, customer focus, innovation.
Strategic Planning - Looks at how the organization develops strategic objectives and measures progress.
The worksheet asks the assessor to identify strengths and opportunities for improvement in each category based on various indicators. It aims to help organizations evaluate their performance and identify areas for growth.
Organisations and LeadershipOrganisational BehaviourDeve.docxhopeaustin33688
This document provides an overview of organisational leadership and leadership theories. It discusses definitions of leadership, approaches to leadership including trait, behavioural, situational, and transformational theories. It also examines leadership styles, competencies, and emerging perspectives such as authentic, distributed, and implicit leadership. The document is a lecture on organisational behaviour and leadership developed by two authors and academics.
A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
Executive Directors Chat Leveraging AI for Diversity, Equity, and InclusionTechSoup
Let’s explore the intersection of technology and equity in the final session of our DEI series. Discover how AI tools, like ChatGPT, can be used to support and enhance your nonprofit's DEI initiatives. Participants will gain insights into practical AI applications and get tips for leveraging technology to advance their DEI goals.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
The simplified electron and muon model, Oscillating Spacetime: The Foundation...RitikBhardwaj56
Discover the Simplified Electron and Muon Model: A New Wave-Based Approach to Understanding Particles delves into a groundbreaking theory that presents electrons and muons as rotating soliton waves within oscillating spacetime. Geared towards students, researchers, and science buffs, this book breaks down complex ideas into simple explanations. It covers topics such as electron waves, temporal dynamics, and the implications of this model on particle physics. With clear illustrations and easy-to-follow explanations, readers will gain a new outlook on the universe's fundamental nature.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
1. OFFSHORE FINANCIAL CENTRES: PARASITES OR
SYMBIONTS?*
Andrew K. Rose and Mark M. Spiegel
This article analyses the causes and consequences of offshore
financial centres (OFCs). While OFCs
are likely to encourage bad behaviour in source countries, they
may also have unintended positive
consequences, such as providing competition for the domestic
banking sector. We derive and sim-
ulate a model of a home country monopoly bank facing a
representative competitive OFC which
offers tax advantages attained by moving assets offshore at a
cost that is increasing in distance to the
OFC. Our model predicts that proximity to an OFC is likely to
be pro-competitive. We test and
confirm the predictions empirically. OFC proximity is
associated with a more competitive domestic
banking system and greater overall financial depth.
Offshore financial centres (OFCs) are jurisdictions that oversee
a disproportionate
level of financial activity by non-residents. Financial activity in
OFCs is usually domi-
nated by the provision of intermediation services for larger
neighbouring countries. In
this article, we ask two distinct questions concerning the causes
and consequences of
OFCs. First, why do some countries become OFCs? Second,
what are the consequences
of OFCs for their neighbours?1
2. What makes a country likely to become an offshore financial
centre? We approach
this question with both bilateral and multilateral data sets.
Using bilateral data from
over 200 countries in the Coordinated Portfolio Investment
Survey (CPIS), we examine the
determinants of cross-border asset holdings for 2001 and 2002
using a gravity model.
We confirm these results using a probit model applied to a
multilateral cross-section of
over 200 countries for the same time period. Unsurprisingly, tax
havens and money
launderers host more assets and are more likely to be OFCs.
These results are intuitive;
one attraction of moving assets offshore is the ability to pursue
activities that are
prohibited in source countries.
Do OFCs make bad neighbours? One might expect proximity to
an OFC to be bad
for the neighbourhood, since OFCs encourage tax evasion and
other illegal activities.
However, the presence of nearby offshore financial centres may
also have beneficial
effects. Most importantly, the presence of an OFC with an
efficient financial sector may
increase the competitiveness of a source country’s banking
sector, though this benefit
is tempered by transactions costs. The tradeoff between the
positive and negative
externalities of OFCs lies at the heart of our article.
To analyse this tradeoff, we develop a model where OFCs have
this benign effect,
even though shifting assets offshore is costly. In our model a
3. home country monopoly
* We thank Gian-Maria Milesi-Ferretti for inspiration,
conversations, and data. Jessica Wesley provided
excellent research assistance. For comments, we thank: two
anonymous referees, Joshua Aizenman, Sven
Arndt, Michael Dooley, Pierre-Olivier Gourinchas, Galina Hale,
Ann Harrison, Sebnem Kalemli-Ozcan,
Andrew Scott and seminar participants at Berkeley, NBER,
Santa Cruz and Singapore. The views expressed
below do not represent those of the Federal Reserve Bank of
San Francisco or the Board of Governors of the
Federal Reserve System, or their staffs. A current (PDF) version
of this article and the STATA data set used in
the article are available at
http://faculty.haas.berkeley.edu/arose.
1 We use �country� below to refer to nations, territories,
colonies and so forth.
The Economic Journal, 117 (October), 1310–1335. � The
Author(s). Journal compilation � Royal Economic Society
2007. Published
by Blackwell Publishing, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
[ 1310 ]
bank faces a competitive fringe of OFCs that survive by
offering tax advantages, subject
to a fixed cost of moving assets offshore. We use the model to
examine the impact of
OFC proximity on the distribution of assets between the home
country bank and the
4. OFC. In general, proximity to an OFC has ambiguous effects on
welfare and asset
distribution. When we simulate our model, we find that OFCs
have strong pro-
competitive effects on the domestic banking sector. We then
take the predictions of the
model to the data and examine the impact of OFC proximity on
banking-sector
competitiveness and financial depth. We robustly confirm the
prediction that OFCs
have a pro-competitive impact on their neighbours. Proximity to
an OFC also has a
positive effect on financial depth.
To summarise, we find that countries identified as tax havens
and money launderers
are likely to be OFCs, encouraging tax evasion and nefarious
activity in neighbouring
source countries. Nevertheless, OFCs still provide substantial
offsetting benefits in the
form of competitive stimulus for their neighbours� financial
sectors. This benign impact
on local banking conditions tends to mitigate the adverse effects
of OFCs on tax
evasion and illegal activity.
The next Section analyses OFC determination, using both
bilateral and multilateral
data sets. Section 2 develops a theoretical model of OFCs that
compete with a domestic
monopolist bank by providing tax benefits. Simulations of the
model allow us to gauge
the offsetting effects on assets and welfare; these predictions
are tested in Section 3.
The article concludes with a brief summary.
5. 1. Determinants of Offshore Financial Centres
The costs of shifting assets offshore have fallen over time but
they remain non-trivial.
Why do assets get shifted offshore? More generally, why do
offshore financial centres
exist? We begin our study by showing that OFCs are created to
facilitate bad behaviour
in source countries, such as tax evasion and money laundering.
The small literature of relevance leaves little doubt that
offshore financial centres
encourage tax evasion. Indeed, in their survey of OFC activity
Hampton and Chris-
tensen (2002) use the terms tax haven and OFC interchangeably;
see also Coates and
Rafferty (2006) and Masciandaro (2005). Recently, steps have
been taken to mitigate
the opportunities for tax evasion afforded by OFCs. In 2000, the
OECD identified over
thirty countries as engaging in harmful tax evasion practices,
including countries such
as Andorra, Bahrain, Cook Islands and Dominica. Countries on
the list were given
deadlines to change their policies and avoid sanctions.2 Most
nations complied with the
OECD.3 The G7 has also pursued initiatives against money
laundering practices,
including the creation of a Financial Action Task Force.4
Hampton and Christensen
(2002) predict that such initiatives will eventually erode OFCs�
advantages and push
capital back �onshore�. Still, the facilitation of tax evasion
remains one of the most
obvious determinants of OFC status.
6. [ O C T O B E R 2007] 1311O F F S H O R E F I N A N C I A L
C E N T R E S
2 http://www.oecd.org/dataoecd/9/61/2090192.pdf
3 There were some notable holdouts; as of 2004, Andorra,
Liberia, Liechtenstein, the Marshall Islands, and
Monaco were still listed by the OECD as pursuing harmful tax
practices (OECD, 2004).
4 More details on the FATF are available at: http://www.fatf-
gafi.org/; see also Masciandaro (2005) and
references therein.
� The Author(s). Journal compilation � Royal Economic
Society 2007
1.1. A Bilateral Approach to Cross-border Asset Holdings
We begin by taking advantage of the Coordinated Portfolio
Investment Survey (CPIS) data
set. This data set is useful for studying the generic behaviour of
cross-border asset
holdings.5 While there is no special place for offshore financial
centres in the data set,
all the conventional OFCs are included in the data set (more on
this below). This data
set has its flaws; for instance, certain areas (e.g., Aruba) have a
large number of missing
entries. There may also be under-reporting, especially of
derivatives, and identifying
the nationality of the true asset holder is not easy. Still,
investigating these bilateral asset
stocks seems a good place to begin identifying why assets are
7. held overseas, the essential
feature of offshore financial centres. This data set has been used
by a number of other
scholars, including most prominently Lane and Milesi-Ferretti
(2004).6
The CPIS data are freely available at the IMF’s website at year-
ends for 2001 and
2002.7 In particular, we use Table 8, which provides a
geographic breakdown of total
portfolio investment assets. These data form a bilateral matrix;
they show stocks of
cross-border holdings of assets, measured at market prices.
Thus, one can determine
that e.g., at the end of 2001, Argentine residents were reported
to hold $29 million in
total portfolio investment assets in Austria.
Since the CPIS data set is bilateral, it is natural to use the well-
known �gravity model�
of trade as a baseline. The gravity model explains activity
between two countries as
being a positive function of the economic masses of the
countries and a negative
function of the distance between them. Variants of gravity
models have been widely
used in the literature by e.g., Alworth and Andresen (1992),
Lane and Milesi-Ferretti
(2004) and Portes and Rey (2005). In practice we use population
and real GDP
per capita to proxy economic mass, and great-circle distance
and a few other measures
to proxy economic distance. After controlling for these
influences, we then investigate
whether there is any additional role for institutional measures.
8. We use CPIS data for both 2001 and 2002. We drop a few
insignificant areas
because of data difficulties.8 We are left with a bilateral data
set with data from 69
source and 222 host countries.9 (A list of the countries is
provided in Appendix
Table A1.) We then merge in a host of bilateral variables taken
from the gravity
5 Alworth and Andresen (1992) is an antecedent of our work
that estimates the determinants of cross-
country bank deposits using BIS data between 17 source and 23
host countries for 1983, 1986, and 1990. They
find a significant role for bank secrecy in attracting deposits,
presumably to facilitate tax evasion and/or
money-laundering. Portes and Rey (2005) focus instead on
equity using a bilateral panel of data between 14
rich countries (including Hong Kong and Singapore) from 1989
to 1996; they find a strong role for infor-
mation in explaining asset flows.
6 For instance, Lane and Milesi-Ferretti (2004) conduct an
analysis that is complementary to ours. While we
both use gravity models, our analysis includes all assets for
2001–2 and focuses on the role of OFCs. In
contrast, they analyse portfolio equity for 2001 using the CPIS
data set and exclude OFCs.
7 http://www.imf.org/external/np/sta/pi/geo.htm. Further details
are available at http://www.imf.org/
external/np/sta/pi/cpis.htm.
8 In particular, the CPIS data show no cross-border holdings
for, e.g., the British Indian Ocean Territory
(Diego Garcia), Christmas Island, and others; we drop them
from our sample. We also drop areas with small
9. holdings but other data problems, such as the French Southern
Territories (Iles Crozet, Iles Kerguelen, Ile
Amsterdam, and Ile Saint-Paul) and Niue.
9 We use the word �country� to denote any territory or area
for which we have data (of relevance); these
need not be e.g., diplomatically recognised sovereign states
with UN seats. Thus we include: territories (e.g.,
American Samoa); physical disparate parts of countries (e.g.,
Aruba); self-governing areas (e.g., Cook
Islands); special administrative areas (e.g., Hong Kong);
dependencies (e.g., Guernsey); commonwealths in
political unions (e.g., Northern Mariana Islands); disputed areas
(e.g., Taiwan) and so forth.
1312 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
literature in international trade. These include: source and host
country population
and real GDP per capita (both taken essentially from the World
Bank’s World Devel-
opment Indicators). We also include colonial history,
geographic features, and measures
of bilateral distance, common language, and common currency.
The latter data are
mostly taken from Glick and Rose (2002). Further details and
the datasets are
available online.
To all these conventional variables, we add three sets of
additional variables. First, we
10. add dummy variables for source/host countries that are tax
havens and/or money
launderers.10 For the former, we combine three indicators on
tax havens, provided by
the OECD, CIA, and Hines and Rice (1994).11 For the latter,
we use the June 2000
OECD Report from the Financial Action Task Force on Money
Laundering.12 Second,
we add variables (again, for both source and host countries) that
measure the rule of
law, political stability, and regulatory quality. These are
continuous variables (where
higher values better governance), and are taken from
�Governance Matters III� by
Kaufmann et al. (2003).13 Third, we add variables for the legal
origins (of both source
and host countries), focusing on countries with legal origins in
common, civil and
French law.14
We estimate the following equation:
lnðXijtÞ ¼ b0 þ b1 lnðDijÞ þ b2 lnðYitÞ þ b3 lnðYjtÞ þ b4
lnðPopitÞ þ b5 lnðPopjtÞ
þ b6Contij þ b7Langij þ b8CUijt þ b9ComColij þ b10Colijt þ
b11Islandi
þ b12Islandj þ b13Landli þ b14Landlj þ b15 lnðAreaiÞ þ b16
lnðAreajÞ
þ c1Taxhi þ c2Taxhj þ c3Moneyli þ c4Moneylj þ c5Rulei þ
c6Rulej þ c7Poli
þ c8Polj þ c9Regi þ c10Regj þ c11Commoni þ c12Commonj þ
c13Civili
þ c14Civilj þ c15Frenchi þ c16Frenchj þ eijt
ð1Þ
11. where i denotes the source country, j denotes the host, t denotes
time, ln(Æ) denotes the
natural logarithm operator, and the variables are defined as:
10 Huizinga and Nielsen (2002) provide a related theoretical
analysis of the differences between infor-
mation provision and withholding taxes in the context of taxing
interest across national boundaries. See also
OECD (2000). In future work it would be interesting to treat tax
havens and money launderers endogenously.
11 Further details and the underlying data themselves are
available at the sources. The OECD identifies tax
havens on the basis of underlying policies. For instance, pp. 9–
10 of the OECD’s 2000 Report to the Min-
isterial Council Meeting Towards Global Tax Co-operation lists
the four main factors that are used to 47 tax
havens identified by the OECD:
(1) low or no nominal taxes on the relevant income;
(2) a regime that is ring-fenced from the domestic economy;
(3) low transparency about the regime’s disclosure, regulatory
supervision, tax details and/or application,
and
(4) no effective exchange of information.
More details are available at
http://www.oecd.org/dataoecd/9/61/2090192.pdf. The CIA also
provides (a
little) more information on its data, at
http://www.cia.gov/cia/publications/factbook/fields/2116.html.
12 We use the 2000 data, since it was the first review by the
FATF, and use jurisdictions either reviewed or
reviewed and deemed non-cooperative countries or territories.
12. More details are available at http://
www1.oecd.org/fatf/pdf/AR2000_en.pdf. For an analysis that
treats money laundering as a choice variable
determined by the national authorities, see Masciandaro (2005).
13 http://www.worldbank.
org/wbi/governance/pubs/govmatters3.html
14 For legal origins, we start with the well-known LaPorta,
L�opez-de-Silanes, Shliefer and Vishny data
set available at
http://mba.tuck.dartmouth.edu/pages/faculty/rafael.
laporta/publications/LaPorta%20
PDF%20Papers-ALL/Law%20and%20Finance- All/Law_fin.xls
and fill in gaps with data from the CIA,
available at:
http://www.cia.gov/cia/publications/factbook/fields/2100.html.
2007] 1313O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
� Xij denotes cross-holdings from i held in j, measured in
millions of dollars,
� D is the distance between i and j,
� Y is annual real GDP per capita in dollars,
� Pop is population,
� Cont is a binary variable which is unity if i and j share a land
border,
� Lang is a binary �dummy� variable which is unity if i and j
have a common
language and zero otherwise,
13. � CU is a binary variable which is unity if i and j use the same
currency at time t,
� ComCol is a binary variable which is unity if i and j were
both colonised by the
same country,
� Col is a binary variable which is unity if i and j are colonies
at time t,
� Island is a binary variable if the country is an island nation,
� Landl is a binary variable if the country is landlocked,
� Area is the area of the country (in square kilometres),
� Taxh is a binary variable which is unity for tax havens,
� Moneyl is a binary variable which is unity for money
launderers,
� Rule is a measure of the rule of law,
� Pol is a measure of political stability,
� Reg is a measure of regulatory quality,
� Common is a binary variable which is unity for common-law
countries,
� Civil is a binary variable which is unity for civil-law
countries,
� French is a binary variable which is unity for French-law
countries,
� b is a vector of nuisance coefficients, and
� eij represents the omitted other influences on bilateral
exports, assumed to be
well behaved.
We estimate this equation with conventional OLS, using a
robust covariance esti-
mator to handle heteroscedasticity, adding year-specific fixed
effects. Rather than drop
the many observations for which the stock of cross-holdings is
zero, we substitute a very
small number for zero (and the occasional negative) values.15
14. The coefficients of
interest to us are fcg.
Our baseline results, excluding the institutional variables, are
tabulated in the extreme
left column of Table 1. The model delivers sensible estimates.
For instance, higher
population and GDP per capita in either the source or host
countries encourage greater
cross-holdings. Second, geography matters, in the sense that
more distance between the
two countries lowers cross-holdings, while a shared land border,
language, or money
raises them. All these effects are sensible, economically large,
and statistically significant
at conventional significance levels. Further, the model fits the
data well, accounting for
over half the variation in an essentially cross-sectional data set.
The results also seem
robust to splitting the data into individual years, and to
dropping the zero values of the
regressand (these sensitivity checks are tabulated in successive
columns).
15 We use $100 in place of 0 or negative values. Alternative
estimation strategies might be:
(a) averaging the data across years;
(b) using Tobit or
(c) weighting countries in some way and using GLS;
we leave such issues to future research.
1314 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
15. Table 1
Bilateral Determinants of Cross-border Asset Holdings
Pooled 2001 2002
Pooled,
without
0 values
Pooled,
with
institutions
Pooled,
with
institutions,
legal regime
Log Distance �1.14 �1.24 �1.04 �0.49 �1.23 �1.13
(0.08) (0.09) (0.09) (0.05) (0.08) (0.08)
Log Host Population 1.22 1.23 1.21 0.49 1.26 1.25
(0.04) (0.05) (0.05) (0.04) (0.04) (0.04)
Log Source Population 0.57 0.50 0.67 0.68 0.61 0.55
(0.05) (0.05) (0.05) (0.04) (0.05) (0.05)
Log Host Real GDP p/c 3.44 3.35 3.53 1.92 2.01 1.92
(0.05) (0.05) (0.05) (0.05) (0.09) (0.09)
17. Rule Law, Host �0.27 �0.24
(0.17) (0.17)
Rule Law, Source 2.32 2.33
(0.24) (0.24)
Political Stability, Host �0.14 �0.19
(0.10) (0.10)
Political Stability, Source �1.65 �2.03
(0.18) (0.18)
Regulatory Quality, Host 2.19 2.21
(0.15) (0.15)
Regulatory Quality, Source �0.50 �0.06
(0.23) (0.24)
Common Law Host 0.13
(0.18)
Common Law Source 2.48
(0.34)
Civil Law Host 0.64
(0.20)
Civil Law Source 2.95
(0.36)
French Law Host �0.48
(0.13)
2007] 1315O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
18. Society 2007
We then add institutional details in the fifth column. The
coefficients are collectively
significant and have sensible interpretations. Host countries that
are tax havens and/
or money launderers are more likely to attract cross-holding;
comparable source
country effects are present but smaller. Neither the rule of law
nor the political
stability of host countries seems to be relevant. But politically
unstable countries and
those with a strong rule of law are both more likely to send
funds overseas. While
regulatory quality in the source country has little effect on
cross-holdings, host
countries with higher regulatory quality are much more likely to
attract assets. All this
make sense.
Finally, in the last column (on the extreme right) of Table 1 we
add dummy variables
for the legal origins of both source and host countries. These
are of only minor rele-
vance. Common and civil-law countries are more likely to be
the source of cross-
holdings; countries with French law are less likely to be hosts.
We take two primary results from the bilateral sample: First,
geography plays a
significant role in the determination of cross-border flows, even
after
conditioning for other factors that may be correlated with
distance that could affect
19. cross-border flows. While a role for geography would be
obvious in the case of flows
of goods, the role of distance in asset flows is less obvious, but
appears to be
important in the data. Second, identification as a tax haven or
money launderer is
associated with an increase in cross-border flows, suggesting
that the desire to cir-
cumvent local taxes or other local laws plays a role in the
decision to move
assets offshore. Both of these considerations are addressed in
the model introduced
below.
1.2. Multilateral Evidence on Offshore Financial Centre
Determination
We now corroborate our key findings from the bilateral CPIS
data set with a multi-
lateral approach. In particular, we test for the importance of,
e.g., being a tax haven,
using the common law, or having political stability on the
likelihood of being an
offshore financial centre.
Table 1
Continued
Pooled 2001 2002
Pooled,
without
0 values
Pooled,
20. with
institutions
Pooled,
with
institutions,
legal regime
French law Source 0.42
(0.14)
Observations 12,220 6,364 5,856 6,063 12,220 12,220
R2 0.56 0.54 0.57 0.54 0.60 0.60
Root MSE 4.572 4.646 4.486 2.442 4.362 4.337
Regressand is log of asset stocks, with 0 replaced by 0.0001
(except in fourth column, where 0 values
dropped).
OLS. Fixed year intercepts included but not recorded. Also
included but not recorded: log area source, log
area host, landlocked source dummy, landlocked host dummy.
Robust standard errors (clustered by country-
pairs) in parentheses.
1316 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
Our multilateral approach is cross-sectional in nature. Since we
are interested in
determining which countries have chosen to become OFCs, it is
21. important first to
identify the OFCs themselves. Rather than develop our own
methodology to identify
OFCs, we gather these data from three basic sources (which
have considerable over-
lap). We use the dummy variables indicating either �Financial
Centre with Significant
Offshore Activities� or �Major Financial Centre with onshore
and offshore activity� from
Report of the Working Group on Offshore Centres of the
Financial Stability Forum.16 We also
include �Countries and Territories with Offshore Financial
Centres� from Errico and
Musalem (1999). Finally, we include �International and
Offshore Financial Centres�
from IMF (2004), whether �Contacted – Module 2
Assessment� or �Contacted under the
FSAP�.17 We further impose the requirement that the OFC host
at least $10 million in
total assets, and that it not be an OECD country.18 This delivers
our default set of 40
OFCs, which are listed in Appendix Table A2. As can be seen
from the Table, OFCs are
clustered regionally; notable groupings are in the Caribbean and
Europe. Consistent
with our results, they tend to be clustered around places with
high taxes and a high
demand for nefarious financial activity.19
Our default set of OFCs is a 0/1 binary variable; a country
either is or is not an
offshore financial centre. To check the robustness of our results,
we also construct a
continuous variable. This is derived by combining the three
dummy variables above
with two others. The first is a dummy that is one if and only if
22. the CIA mentions that the
country is an �offshore financial centre� in its discussion of
illicit drugs in the World
Factbook.20 The second is derived by aggregating (across
source countries) the residuals
from the default pooled model of Table 1.21 We then combine
the variables by using
the first principal factor from the five underlying variables.22
This gives us a continuous
version of our default binary variable. The two variables are
highly correlated (the
correlation coefficient is 0.84).23
We gathered data on 223 countries (listed in Appendix Table
A3), including our
default set of 40 OFCs. We use data averaged from 2001 and
2002, both to smooth the
data and to stick as close to our bilateral data set as closely as
possible. We condition
on the natural logarithms of both population and real GDP per
capita throughout
16 Available at
http://www.fsforum.org/publications/publication_23_31.html.
17 Available at
http://www.imf.org/external/np/mfd/2004/eng/031204.pdf
18 The �offshore financial centres� that are caught by the
latter requirement since they are OECD countries
are: USA; UK; Austria; Luxembourg; Netherlands; Switzerland;
Japan; Ireland; Australia; and Hungary. In our
analysis, we label these as non-OFCs, but retain them in the
sample. Of the potential OECD OFCs, we
consider only Luxembourg to be a potentially serious issue.
19 OFCs also tend to be largely absent from places with poor
23. banking systems (such as Africa and Central
Asia), consistent with the results we present below.
20 Available at
http://www.cia.gov/cia/publications/factbook/fields/2086.html.
21 The aggregated residual has at the top: Cayman Islands;
British Virgin Islands; Netherlands Antilles;
Liberia; and Tuvalu. While this – and the set of countries
ranked slightly lower down – makes sense, the
countries at the other end are more suspicious. They include:
Faroe Islands; French Polynesia; Greenland;
Puerto Rico; and Isle of Man. The last entry and a few others
towards the bottom (e.g., Macau, Malta, UAE,
and Aruba) make us take this measure with a grain of salt.
22 Each of the five has positive factor loadings and scoring
coefficients; the first factor explains essentially
all of the variance of the five variables.
23 The continuous variable has at the top: Cayman Islands;
British Virgin Islands; Panama; Bahamas; and
Singapore. The countries at the other end include: Faroe
Islands; French Polynesia; Greenland; Martinique;
and Syria.
2007] 1317O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
(again, taken mostly from the World Bank’s World
Development Indicators). We then add
sequentially:
24. (a) dummy variables for tax havens and money launderers,
(b) the three institutional measures (rule of law, political
stability, and regulatory
quality) and
(c) the three legal regimes.
In Table 2a we use our default dummy variable measure of
OFCs, estimated using
probit. Panel b is the analogue that uses OLS (with robust
standard errors) on our
continuous measure of OFC activity.
The most striking results in Table 2 are in column (2), where we
consider the first
two institutional features: tax haven and money laundering
status. Being either a tax
haven or a money launderer has an economically and
statistically strong effect in
raising the probability of being an OFC.24 This confirms our
findings from the bilateral
results that sinful countries are strongly associated with
offshore financial centres. On
the other hand, our other measures of institutional quality and
the legal regime have
no strong consistent effect on OFC determination. Conditioning
on population and
GDP per capita seems to have little consistent strong effect.
We have engaged in extensive sensitivity analysis with respect
to the determination of
OFCs; part of it is reflected in Table 2c. This shows the results
of adding 10 different
variables to the specification of column (2), which includes tax
haven and money
25. laundering status. Two estimates are supplied: the middle
column is the result of
adding the variable to the probit estimation for the default
binary measure of OFCs,
while the right column tabulates the OLS coefficient from
adding the variable to the
continuous OFC specification.
We have added successively:
(a) a dummy variable that is unity if the country is English-
speaking;
(b) the official supervisory power aggregate from Barth et al.
(2001);25
(c) a dummy variable for the presence of capital controls taken
from the IMFs
Annual Report on Exchange Arrangements and Exchange
Restrictions;
(d) the corporate tax rate, essentially taken from Ernst &
Young;26
(e) the country’s average Polity IV score;27
(f) average openness, the ratio of exports plus imports to GDP,
taken from the WDI;
(g) the UNDPs human development index;28 and lastly
(h) measures of political rights, civil rights, and freedom, all
provided by Freedom
House.29
24 This result is consistent with the approach of Huizinga and
Nielsen (2002) who treat policies like
withholding taxes and information provision as substitute
26. policies.
25 The data set is available at
http://www.worldbank.org/research/interest/2003_bank_survey/
wb_
banking_survey_032904.xls
26 Available at
http://www.ey.com/global/download.nsf/Argentina/WorldwCorp
orateTaxGuide/$file/
WHOLE_FILE.pdf
27 Available at http://www.cidcm.umd.edu/inscr/polity/.
28 Available at
http://hdr.undp.org/docs/statistics/indices/index_tables.pdf
29 Available at
http://www.freedomhouse.org/research/freeworld/2004/tables.ht
m
1318 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
None of these variables are consistently strongly tied to our
measures of OFCs despite
our best attempts. We also tabulate the p-values for the joint
significance of two sets of
dummy variables:
Table 2
Multilateral Determinants of Cross-Border Asset Holdings
27. (1) (2) (3) (4)
(a) Dummy Variable for OFC
Population �0.11 0.11 0.01 0.01
(0.04) (0.06) (0.09) (0.10)
GDP p/c 0.44 0.39 0.35 0.49
(0.11) (0.13) (0.30) (0.31)
Tax Haven 1.34 1.05 0.87
(0.36) (0.43) (0.45)
Money Launderer 1.51 1.87 1.87
(0.35) (0.48) (0.48)
Rule of Law �0.24 �0.39
(0.50) (0.52)
Political Stability �0.13 �0.07
(0.29) (0.31)
Regulatory Quality 0.32 0.32
(0.46) (0.46)
Common Law �0.05
(0.50)
Civil Law �0.94
(0.60)
French Law 0.60
(0.44)
Observations 223 223 184 184
Pseudo-R2 0.16 0.42 0.41 0.44
28. (1) (2) (3) (4)
(b) Continuous Variable for OFC activity
Population �0.12 0.01 �0.01 �0.01
(0.03) (0.02) (0.02) (0.02)
GDP p/c 0.23 0.11 0.01 0.04
(0.04) (0.03) (0.04) (0.05)
Tax Haven 1.12 1.08 1.02
(0.25) (0.31) (0.30)
Money Launderer 0.91 1.00 0.96
(0.29) (0.36) (0.36)
Rule of Law �0.11 �0.15
(0.14) (0.14)
Political Stability 0.04 0.06
(0.06) (0.06)
Regulatory Quality 0.18 0.18
(0.12) (0.13)
Common Law 0.11
(0.14)
Civil Law �0.11
(0.13)
French Law 0.10
(0.08)
Observations 221 221 184 184
R2 0.23 0.58 0.59 0.59
29. 2007] 1319O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
(a) a set of regional variables; and
(b) a set of variables for colonial history (so that the British
variable is unity for all
ex-British colonies, and so forth).
We have also experimented with a large number of other
variables with a similar lack
of success.30
Our most robust results from our probit estimation mirror those
of the bilateral
sample above. The main characteristics of those countries
identified as offshore
financial centres are identified as either tax havens or money
launderers. This cor-
roborates the bilateral results from Section 1.1; a primary
motivation for investors in
moving assets offshore is circumvention of domestic tax laws or
other illegal activities.
None of this seems terribly surprising to us; OFCs seem to
facilitate bad behaviour. The
more interesting question is whether they also provide positive
externalities as well; we
now turn to that issue.
Table 2
Continued
30. Binary OFC Measure Continuous OFC Measure
(c) Potential Additional Determinants of OFC
English Language 0.09 �0.04
(0.29) (0.09)
Official Supervisory Power from Barth et al. 0.05 0.02
(0.04) (0.01)
Capital Controls 0.23 0.14
(0.34) (0.15)
Corporate Tax Rate �0.01 �0.00
(0.01) (0.01)
Polity �0.06 �0.00
(0.03) (0.01)
Openness 0.001 0.002
(0.003) (0.002)
Human Development Index �1.66 �0.47
(2.72) (0.37)
Political Rights 0.12 �0.01
(0.08) (0.02)
Civil Rights 0.21 0.00
(0.10) (0.03)
Freedom 0.24 �0.02
(0.21) (0.05)
Regional Dummies (p-value) 0.54 0.08
Colonial Dummies (p-value) 1.00 0.00
31. Regressand is dummy variable for offshore financial centre.
Constants included but not recorded. Probit
estimation; standard errors recorded in parentheses
Regressand is continuous measure of offshore financial centre
activity. Constants included but not recorded.
OLS estimation; standard errors recorded in parentheses.
Regressors included but not recorded: log(population); log(real
GDP per capita); tax haven dummy; money
laundering dummy; intercept. Binary OFC measure regressand:
probit estimation. Continuous OFC measure
regressand: OLS estimation with robust standard errors.
30 We have also
(a) redefined our OFC dummy to include the 10 OECD countries
sometimes as identified as OFCs; and
(b) dropped these same 10 countries from our analysis. Nothing
of substance changes when we do this
sensitivity analysis.
1320 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
2. Consequences of Offshore Financial Centres
The evidence presented in Section 1 indicates that tax havens
and money launderers
are likely to be offshore financial centres. OFCs offer the
advantage of e.g., lower taxes
to domestic investors that can bear the costs of shifting assets.
That is, they compete
32. with the domestic banking sector. While OFCs lower the costs
of unsavoury practices
such as tax evasion, they also provide a benefit in the form of
competition for the
domestic financial sector. We now develop a model that focuses
on the tradeoffs that
OFCs present for source countries.31
2.1. A Simple Theoretical Model of OFC Activity
We assume that the domestic (source) country is populated by a
continuum of
depositors, indexed by I ¼ 1, . . . , m. Depositors are endowed
with initial wealth, w(i).
We number the depositors such that the initial wealth of
depositor i is less than or
equal to the initial wealth of depositor i þ 1. Depositors allocate
their wealth to max-
imise their after-tax income. They can hold three assets:
onshore deposits; offshore
deposits; and an outside alternative. All the assets we consider
below are risk free.
We assume that the alternative asset (perhaps a government
bond) yields an exo-
genous rate of interest; r� is defined as one plus the interest
rate on this asset. We
define rH as one plus the contractual rate of interest paid by the
domestic bank on
deposits and rO as one plus the offshore contractual rate of
interest on deposits. Since
depositors allocate their savings to maximise disposable wealth,
each faces two arbitrage
conditions, one for offshore deposits and one for home deposits.
We assume that there is a fixed cost, denoted ax, of making an
33. offshore deposit,
where a is a constant and x represents the �distance� from the
home country to the
offshore country. This is modelled as an �iceberg� cost that
melts away with offshore
financial activity. This cost can be offset by the tax advantage
of offshore deposits, since
we assume that offshore deposits are taxed at a lower rate than
the true tax rate.
Onshore deposits, by way of contrast, are less costly but are
taxed at a higher rate.
If a representative depositor i places his deposits in the offshore
bank, his final after-
tax wealth satisfies (1�s)[hr0w(i)�ax], where s represents the
nominal domestic tax
rate and h is a parameter representing the tax advantage of the
offshore nation,
1 � h � 1/(1�s). It follows that depositor i will prefer to place
his funds in the
offshore bank relative to the risk-free asset if and only if
rO �
r �wðiÞ þ ax
hwðiÞ : ð2Þ
The smaller are a, x, and r �, the more likely that depositor i is
to take his assets
offshore rather than place them in the risk-free asset; the same
the larger are h, rO and
w(i). We define i � as the depositor that satisfies (2) with
equality, i.e. as the depositor
who is indifferent between taking assets offshore and placing
them in the risk-free asset.
Since w(i) is positively monotonic in i, (2) shows that all
34. depositors i > i � will also take
their assets offshore.
31 The logic of our approach is similar to that of Claessens and
Laeven (2004).
2007] 1321O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
Alternatively, suppose that depositor i places his deposits in the
domestic bank. We
model this as a monopoly; an extreme assumption to be sure but
one that allows us to
focus on the competitive effects easily (an alternative derivation
using the assumption
of a monopolistically competitive domestic banking sector is
provided in the Appen-
dix). The depositor’s final wealth earns a return of (1�s)rH .
Thus depositors prefer the
home bank if rH � r�. We demonstrate below that the profit-
maximising deposit rate
for the home monopolist bank occurs when this condition binds,
i.e. rH ¼ r�. It follows
that when condition (2) holds with equality, depositor i is
indifferent between taking
his assets offshore and holding them in the home country bank.
The offshore bank
then lends out all its deposits, LO , which equal
LO ¼
Zm
35. i�
wðiÞdi: ð3Þ
Borrowers in the model are assumed to obtain funds from banks
under standard
debt contracts, taking the home-country demand for loans as
given. Borrowers are
indifferent between bank sources, so a single lending rate will
prevail in the home
country. Let R represent one plus the contractual interest rate on
lending. We assume
that R is decreasing in aggregate lending, L, which is the sum of
home bank lending,
LH and offshore bank lending, LO, where R
0 < 0, and R 00 < 0.
The offshore bank acts as a competitor and a Stackelberg
follower. The offshore
bank faces diseconomies of scale in lending because of the
fixed cost of moving assets
offshore. The minimum interest rate consistent with any value
of i � is that which
induces all depositors i� and greater to take their assets
offshore. Having exhausted this
segment of the population, however, the offshore bank can only
further increase its
deposits by attracting depositors that are less wealthy. The fixed
cost of moving assets
offshore financially affects these poorer depositors more
intensely, as the fixed cost is
spread over a smaller deposit. As a result, the offshore bank
must offer a greater
premium over the domestic risk free rate to increase its
deposits. This effectively results
36. in an upward-sloping supply of funds facing the offshore bank.
Taking domestic lending as given, the offshore bank raises
deposits at rates where (2)
is binding and issues loans until it satisfies its zero profit
condition
hwði�ÞR ¼ r �wði�Þ þ ax: ð4Þ
Totally differentiating (4), the comparative static relationship
between LO and LH
satisfies
@LO
@LH
¼ hwði
�Þ2R 0
ðhR � r �Þw0 � hwði�Þ2R 0
< 0: ð5Þ
Equation (4) demonstrates that lending by the domestic bank
crowds out lending by
the OFC. However, note that |oLO/oLH| < 1, which implies that
crowding out is less
than one for one, so that an increase in LH increases overall
lending levels.
We next turn to the lending decision of the home country bank.
The domestic bank
acts as a profit-maximising Stackelberg leader. It takes in
deposits equal to LH, which
results in an end-of-period liability of rHLH. Domestic profits
are equal to
37. 1322 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
p ¼ ðR � rH ÞLH : ð6Þ
As profits are decreasing in rH, it follows that the profit-
maximising decision of the
home country bank entails setting rH ¼ r � and maximising
with respect to the choice of
LH. By the envelope theorem, the first-order condition of the
home country bank
satisfies
R � r � þ R 0LH ¼ 0: ð7Þ
Equations (4) and (7) form a system of equations in two
unknowns, LH and i
�. In the
Appendix, we conduct some comparative static exercises to
evaluate the properties of
the model. We demonstrate that an increase in the OFC tax
advantage, h, increases
offshore lending, LO, and reduces home country bank lending,
LH, but less than one
for one, resulting in an increase in overall lending. We also
demonstrate that OFC
lending is decreasing in distance to the home country, x. We
again find a crowding out
effect, as decreased OFC distance reduces home country
lending, but again by less than
the primary effect of increasing lending by the OFC.
38. Effectively, proximity to the OFC
increases the competitiveness of the domestic banking market.
We take the latter result
to the data below.
An alternative strategy for the home country bank to the interior
solution above is to
�limit-price� by issuing sufficient loans that the OFC cannot
compete against in the
home market. By (4), the home bank can limit-price by issuing
an amount of loans that
satisfies
RðLH Þ �
r �wði�Þ þ ax
hwði�Þ : ð8Þ
Satisfaction of (8) with inequality implies that the OFC would
lose money upon
entry. Note that as x (the distance between the OFC and the
home country) grows, (8)
implies that the domestic loans necessary to achieve limit-
pricing becomes arbitrarily
small. Indeed, it may fall below the pure monopoly solution for
the home country bank
in the absence of the OFC, which is the solution to (7) given LO
¼ 0.
It follows that as x increases from 0, the solution for the home
country bank passes
through three distinct ranges: first, it follows the interior
solution to (7), competing
head-to-head with the OFC. As distance between the OFC and
the home country grows
further, the home bank switches to the limit pricing strategy in
39. (8). Finally, when the
OFC is sufficiently distant, the limit pricing solution falls
below the monopoly opti-
mum, which is the level of LH that satisfies (7) conditional on
LO ¼ 0, and the domestic
bank switches to the pure monopoly solution. These transitions
are illustrated in our
simulations below.
Finally, we turn to the question of the impact of the OFC on
home country welfare.
We assume that taxes are redistributed lump sum, so that home
country welfare is
invariant to the level of government revenues.32 Home country
welfare can therefore
be measured in terms of the net gains from intermediation
relative to placing all
32 One could easily imagine an extension of the model where
taxes had a distortionary impact and the loss
of revenues to the home country government resulted in higher
tax rates and therefore welfare-reducing
increases in domestic distortions.
2007] 1323O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
deposits in the alternative asset. This is the sum of borrower
consumer surplus, home
bank profitability and depositor revenues, net of taxes and the
cost of moving funds
offshore. Adding these together and simplifying yields:
40. W ¼
ZL
0
ðR � r �Þdl � ðm � i�Þax: ð9Þ
Equation (9) demonstrates the welfare tradeoff associated with
proximity to an OFC.
On one hand, the OFC induces the home country bank to behave
more competitively,
increasing lending and overall welfare. On the other hand,
depositors are partially
motivated to take their funds offshore for purely redistributive
reasons, in particular to
lower their taxes. While the redistribution does not affect
welfare, the resource cost of
moving those assets offshore is a deadweight loss. As a result,
the overall impact on
domestic welfare of OFC-proximity is ambiguous.
2.2. Simulations
To gauge the impact of the OFCs� proximity and tax advantage
on overall activity in the
home country, we now simulate the model. For simplicity, we
model w(i) as a linear
function, setting w to an exogenous constant. We also assume
that the domestic interest
rate is a (negative) linear function of domestic lending, L that
satisfies
R ¼ �R þ R 0L; ð10Þ
where �R and R 0 are constants �R > 0, R 0 < 0.
41. Given these assumptions, we derive the expressions for (4) and
(7) in the
Appendix. This yields a system of two equations in two
unknowns, LH and i
�.
The solution allows us to determine both the equilibrium loan
rate and aggregate
welfare.
We parameterise the model by setting the return on the
alternative asset r� equal to
1.2. We set the tax advantage of the OFC, h, to 1.2 (though we
have also examined
alternative values without any large change in results). We set
the cost of moving assets
offshore, a, to 1.33 We set w equal to 2 and m equal to 1. This
normalisation implies that
the equilibrium value of i� represents the share of depositors
who do not take their
assets offshore, as depositors 0 to i� leave their assets in the
home country. Finally, we
normalise local interest rates by setting �R equal to 2 and R 0
equal to �0.85, although we
entertain other values of R 0 below.
While numerical values are a necessary part of our simulations,
we concentrate on
their qualitative results. Figure 1 plots home-bank lending (LH),
total lending (L),
interest rates (R), and welfare as a function of distance to the
OFC (x), for different
values of R 0. It can be seen that proximity to the OFC has the
pro-competitive impact
that we anticipated. It can also be seen that there are three
42. distinct ranges, with discrete
jumps in all values when the home bank switches from
competing head-to-head to a
limit pricing strategy.
33 Note that the value of a effectively only determines the
normalisation for x (the distance parameter) as x
only enters into the cost function in conjunction with a.
1324 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
It is useful to consider the impacts on all of the endogenous
variables as x increases.
Beginning at x ¼ 0, we are first in the range where the
monopoly bank competes with
the OFC head to head. As distance to the OFC increases, the
home country bank
expands its lending, taking advantage of the deterioration in
competitiveness of the
OFC. Nevertheless, the increase in LH is more than offset by a
decline in LO, so that
overall lending is declining. It can be seen that over this range
R increases with
distance, so that increased proximity to the OFC has the
expected impact of increasing
the competitiveness of the domestic banking sector.
Note that welfare falls dramatically with increased distance
within this range, even
relative to the pure monopoly solution. Welfare losses with
increased distance come
43. from two sources: the decreased competitiveness of the banking
sector, and the
increased cost of moving assets offshore. Of course, the latter
eventually reduces the
amount of offshore activity taking place.
As x increases beyond xLP, the home country bank switches to
a limit-pricing strategy,
lending the amount necessary to keep the OFC out of its market.
It can be seen that
there is a discrete increase in both home and overall lending at
this point, resulting in a
discrete decline in R, as well as a discrete increase in overall
welfare. As x increases
within the limit pricing range, overall lending and welfare
decline, as the amount of
home bank lending necessary to preclude entry by the OFC
decreases.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
46. � The Author(s). Journal compilation � Royal Economic
Society 2007
Finally, when x reaches xM, the minimum level of lending
required to achieve limit
pricing matches the pure monopoly solution. At this point, home
country lending, as
well as the other variables, are invariant to further increases in
x.
3. Evidence on the Impact of OFCs on their Neighbours
We now take the theoretical predictions of the previous Section
to the data. Our
model suggests that home country bank profits are declining in
proximity to the
OFC, while overall local lending is increasing in OFC
proximity.34 Accordingly, we
use our multilateral data set to address two questions. First, is
OFC proximity
actually associated with increased domestic banking
competitiveness? Second, is OFC
proximity also associated with greater financial intermediation?
We use different
measures of both banking competitiveness and financial
intermediation that are
common in the literature, and control for a number of auxiliary
explanatory vari-
ables.
We use the multilateral data set that we developed and
employed in Section 1.2
above. This is a cross-section from 2001–2 that includes 40
OFCs (tabulated in
47. Table A2) among the 223 countries in our sample (tabulated in
Table A3). Our
measure of OFC proximity is (the natural logarithm of the)
distance to the nearest
OFC.35 This serves as the regressor for our coefficient of
interest.
Our base specification conditions on the natural logarithms of
both population
and real GDP per capita, as well as a dummy variable for
countries that are OFCs
themselves. In subsequent specifications, we add a number of
additional conditioning
variables to check the sensitivity of our results. These controls
include dummy vari-
ables for legal regimes based on Civil or French Law, hours of
latitude, a landlocked
nation dummy variable, and the percentage of population that is
Christian or Mus-
lim. Remoteness for country i is defined traditionally, as the
average (log) distance
between i and (log) GDP in the rest of the world; this variable
is intended to serve as
an indicator of overall remoteness, rather than the remoteness
associated with dis-
tance from an OFC.36 We also add a variable for openness,
measured as total trade as
a percentage of GDP. We also tabulate simple bivarate
regression results, without any
controls at all (except a constant). Finally, we provide
instrumental variable results,
motivated by the results of Table 2. As instrumental variables
for distance to the
closest OFC, we use:
(1) OFC remoteness;
48. (2) distance to the closest tax haven; and
(3) distance to the closest money launderer.
Our estimating equation takes the form:
34 Our model predicts this behaviour within the range where the
home country bank was not engaged in
limit-pricing, which we perceive to be the norm.
35 Our concentration on the nearest individual OFC is in the
spirit of constant returns to scale in the
banking technology of the OFC in our theoretical model. We
also examined the sum of distances in miles to
all of the OFCs as a robustness check. These results were very
similar to those reported below.
36 Thus the most remote countries are the Cook Islands, New
Zealand, Niue, and French Polynesia, while
the least remote countries are Croatia, Slovenia, Italy, and
Austria.
1326 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
yi ¼ b lnðmin DistOFCÞi þ c0 þ c1OFCi
þ c2 lnðPopÞi þ c3 lnðY =PopÞi þ Controls þ ei
ð11Þ
where the notation follows that of (1), and the coefficient of
interest is b.
We first test the effect of OFC proximity on domestic banking
49. competitiveness. Thus
for the regressand, y, we use three measures of the degree of
competitiveness of the
local banking sector:
(a) the interest rate spread (loan-deposit) charged by
commercial banks,
(b) the concentration ratio of the domestic banking industry,
measured as the
industry share accounted for by the top five commercial banks,
and
(c) the number of commercial banks in a country divided by the
log of domestic
GDP.37 The coefficient of interest to us is bt, the effect of OFC
proximity on
domestic banking competitiveness; we expect this to be positive
for the first two
regressands (interest spread and concentration ratio) and
negative for the last
(banks/GDP). We estimate our models with OLS/IV, employing
standard
errors robust to heteroscedasticity.
Our results are shown in Table 3a. All of our estimates suggest
that OFC
remoteness is associated with an increase in monopoly power at
statistically and
economically significant levels. The standard deviation of the
minimum distance from
OFC variable is 1.07, so our point estimates suggest that a one
standard deviation
increase in distance to an OFC is associated with, e.g., between
an increase of 1.41%
50. and 2.21% in the interest rate spread and an increase of 1.77%
to 8.22% in the
share of the banking industry controlled by the five largest
commercial banks. The
results for interest rate spreads and bank concentration are
statistically significant at
standard significance levels when controls are included (only
the second is clearly
significant with IV). The effect of OFC proximity on the
number of banks (scaled by
log GDP) is more marginally significant but it improves with
the number of controls.
It seems that OFC proximity is in fact associated with more
competitive domestic
banking.
We next turn to the impact of distance from an OFC on the
depth of domestic
financial intermediation. We use three measures of
intermediation commonly used in
the literature:
(a) credit to the private sector,
(b) quasi-liquid liabilities, and
(c) M2,
all three measures normalised by GDP.38 We now expect the
coefficient of interest, b,
to be consistently negative, since OFC proximity should
increase domestic financial
intermediation.
Our results are shown in Table 3b. The effect of distance to the
closest OFC on
financial intermediation is consistently negative. Moreover, it is
significantly different
51. 37 Data for local bank concentration and the number of
commercial banks come from Demirgüç-Kunt and
Levine (2001).
38 The first measure is obtained from Levine et al. (2000) and
is the average over 1980-95. The latter are
obtained from Barth et al. (2001).
2007] 1327O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
from zero at conventional statistical levels for two of our three
proxies, the ratios of
quasi-liquid liabilities to GDP and M2 to GDP. Distance from
OFC has a negative but
insignificant effect on credit to the private sector as a
percentage of GDP, except for
the (less interesting) bivariate regression.39 Again, these results
are robust to a number
of alternative specifications. The point estimates also indicate
that proximity to an OFC
is consistently of economic significance.40
In summary, we find evidence that distance from an OFC is
associated with a lack of
competitiveness in the local banking sector as indicated by our
theory. Moreover,
financial depth is positively associated with OFC proximity.
While the results are not
always of strong statistical significance, we interpret them as
broadly confirming the
52. prediction of the model.41
Table 3
Impact of OFC Proximity on Domestic Financial System
Measure Bivariate Controls 1 Controls 2 Controls 3 IV
(a) OFC Proximity and Domestic Banking Competitiveness
Loan-Deposit 2.21 1.45 1.41 1.63 1.44
Interest rate Spread (0.62) (0.69) (0.70) (0.79) (0.92)
5-Bank 1.77 4.66 7.53 6.91 8.22
Concentration Ratio (1.75) (1.38) (1.79) (1.98) (2.86)
No. Commercial �0.67 �0.99 �1.16 �1.52 �1.49
Banks (ratio to Log GDP) (0.68) (0.78) (0.65) (0.81) (0.89)
Measure (% GDP) Bivariate Controls 1 Controls 2 Controls 3 IV
(b) OFC Proximity and Financial Depth
Domestic Private �13.7 �1.9 �3.1 �4.1 �3.4
Sector Credit (3.6) (3.0) (2.9) (3.1) (3.4)
Quasi-Liquid �16.3 �8.9 �11.4 �11.6 �7.8
Liability (4.2) (3.3) (3.6) (3.4) (3.2)
M2 �17.1 �9.7 �11.1 �11.5 �5.3
(4.1) (3.4) (4.0) (3.8) (3.7)
Coefficients recorded are for log distance to closest OFC.
Controls 1: OFC dummy; log (2001-2 average)
population; log (2001–2 average) real GDP per capita; intercept.
Controls 2: controls 1 plus trade remoteness;
civil law dummy; French law dummy; landlocked dummy;
latitude in hours; % Christian; % Muslim. Controls
3: controls 2 plus (2001-2 average) trade as a percentage of
GDP. IV: controls 3. IVs for log minimum distance
to OFC include: (1) log minimum distance to tax haven; (2) log
53. minimum distance to money launderer; (3)
remoteness from OFCs. OLS estimation unless labelled; robust
standard errors recorded in parentheses.
39 The distance from OFC variable does robustly enter
significantly as a determinant of credit to the private
sector when the GDP per capita variable is omitted from the
specification. However, this yields a rather
uninteresting specification because it is well-documented that
GDP per capita is highly correlated with
measures of financial depth, e.g. Demirgüç-Kunt and Levine
(2001).
40 We have searched for a scale effect by interacting our
measure of OFC proximity with the natural
logarithms of either real GDP or the population. However, the
coefficients on these terms are consistently
economically and statistically small and insignificant. We have
also attempt to link the Claessens and Laeven
(2004) measure of bank competitiveness to our determinants
without success. This is almost surely a result of
the much smaller sample size; while their Table 3 provides
estimates of H-statistics for fifty countries, that is
still less than a third the size of the sample in our Tables 3 and
4.
41 It is possible that channels other than the pro-competitive
impact stressed in our model are also at work
generating this result. In particular, it is possible that proximity
to OFCs changes government policies towards
its financial system, which may alter the cost of conducting
intermediation for domestic banks.
1328 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
54. Society 2007
4. Conclusion
This article examines both the determinants of offshore
financial centres and the
consequences of OFCs for their neighbours. Using both bilateral
and multilateral
samples, we find empirically that successful offshore financial
centres encourage bad
behaviour in source countries, since they facilitate tax evasion
and money laundering.
At first blush, it thus appears that OFCs are best characterised
as �parasites�, since their
attraction stems in part from allowing their source-country
clients to engage in activities
detrimental to the well-being of their homes.
Nevertheless, offshore financial centres created to facilitate
undesirable activities can
still have unintended positive consequences. In particular, the
presence of OFCs en-
hances the competitiveness of the local banking sector. Using a
model of a domestic
monopoly bank facing a competitive fringe of OFCs, we
demonstrate that OFC prox-
imity enhances the competitive behaviour of the monopoly bank
and may increase
overall welfare. This is true despite the fact that deadweight
losses are borne when
funds are transferred offshore to an OFC. We test these
predictions using a multilateral
data set, and show that proximity to an OFC is indeed
associated with a more com-
55. petitive domestic banking sector, and greater financial
intermediation. We tentatively
conclude that OFCs are better characterised as �symbionts�.
Appendix
A. A Monopolistically-Competitive Model
In this Appendix, we examine a monopolistically-competitive
domestic banking sector. We make
the same assumptions concerning domestic depositors and the
offshore bank, so that (4) still
represents the zero-profit condition for the offshore bank.
To introduce monopolistic competition, we assume that there
are a large number n of
homogeneous monopolistically-competitive banks who paid a
fixed entry cost, c. The represen-
tative domestic bank takes n, lk(k 6¼ j) and LO as given and
faces an individual downward-sloping
demand curve R
̂ , which is assumed to be more elastic than the
overall demand curve faced by the
offshore bank, i.e. jR 0j > jR
̂ 0j. Moreover, the elasticity of
demand faced by the representative
domestic bank is assumed to be an increasing function of n; the
greater is n, the greater is the
capacity to improve market share from local rivals.
Representative bank profits satisfy
pj ¼ R
̂ ½n; lj þ ðn � 1Þlj þ LO � � r �
� �
lj :
The representative bank maximises its profits with respect to its
choice of lj. The first-order
56. condition of the representative domestic bank satisfies
R
̂ lj þ ðn � 1Þlk þ LO
� �
� r �
� �
þ R
̂ 0lj ¼ 0:
In equilibrium, all domestic banks are assumed to be identical,
and the overall demand curve
is assumed to be the same as that faced by the offshore bank, so
that the first order condition
becomes
R
Zm
i�
wðiÞdi þ nl
2
4
3
5� r � þ R
̂ 0l ¼ 0:
It is convenient to rewrite the zero profit condition for the
offshore bank in terms of individual
domestic bank lending levels and n:
2007] 1329O F F S H O R E F I N A N C I A L C E N T R E S
57. � The Author(s). Journal compilation � Royal Economic
Society 2007
hwði�ÞR
Zm
i�
wðiÞdi þ nl
2
4
3
5� r �wði�Þ � ax ¼ 0:
Finally, banks will enter until their zero profit condition is
satisfied:
R
Zm
i�
wðiÞdi þ nl
2
4
3
5� r �
8<
58. :
9=
;l ¼ c:
The last three equations form a system in three unknowns, i�,
n, and l:
w0ðhR � r �Þ � hwði�Þ2R 0 hwði�ÞR 0n hwði�ÞR 0l
�wði�ÞR 0 R 0n þ R
̂ 0 R 0l þ @R
̂ [email protected]
�wði�ÞR 0l R � r � þ R 0nl R 0l2
2
4
3
5 di
�
dl
dn
2
4
3
5 ¼
wði�ÞR �a
0 0
0 0
2
4
59. 3
5 dh
dx
� �
:
The determinant of the system satisfies:
D ¼ w0ðhR � r �ÞðR 0lÞ R
̂ 0l � ðR � r �Þ
� �
� @R
̂ [email protected] w0ðhR � r �Þ ðR � r �Þ þ R 0nl½ �
� hwði�Þ2R 0ðR � r �Þ
n o
:
Since jR 0j > jR
̂ 0j by assumption, (R�r�)þR 0nl < 0 by the
domestic bank’s first order condi-
tion. A sufficient (but not necessary) condition for signing the
determinant is then that @R
̂ [email protected] is
not too large.
The comparative statics for a change in x then satisfy:
di�
dx
¼ 1
D
a R
̂ 0l � ðR � r �Þ
� �
60. ðR 0lÞ � ðR � r � þ R 0nlÞ@R
̂ [email protected]
� �
> 0
dl
dx
¼ 1
D
a wði�ÞR 0l½ �ð@R
̂ [email protected]Þ
� �
< 0
dn
dx
¼ 1
D
awði�ÞR 0 R
̂ 0l � ðR � r �Þ
� �
> 0:
Note that l and n move in opposite directions with a change in
x. For example, with closer
proximity to an OFC, n declines as there is exit from the
domestic banking sector in the face of
heightened competition from the OFC. However, the declines in
domestic lending is partially
offset by the increase in l, lending per bank. The change in
overall lending satisfies:
61. dL
dx
¼ � 1
D
awði�Þ @R
̂
0
@n
ðR � r �Þ < 0:
Since overall lending increases as x declines, it is easy to show
that domestic interest rates fall as
well.
B. Comparative Statics and Simulation Details for the
Monopolistic Model
B.1. Comparative static exercises
We first examine the impact of changes in the tax advantage
enjoyed by the OFC, which is
proxied by changes in h. By (4) and (7), the system of equations
satisfies:
w0ðhR � r �Þ � hwði�Þ2R 0 hwði�ÞR 0
�wði�ÞðR 0 þ R 00LH Þ 2R 0 þ R 00LH
� �
di�
dLH
� �
62. ¼ wði
�ÞR �a
0 0
� �
dh
dx
� �
:
The determinant of the matrix of the system satisfies:
D ¼ w0ðhR � r �Þð2R 0 þ R 00LH Þ � hwði�Þ2ðR 0Þ2 < 0:
The comparative statics for a change in h satisfy:
1330 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
di�
dh
¼ � 1
D
wði�ÞR½ �ð2R 0 þ R 00LH Þ < 0
dLH
dh
¼ � 1
63. D
wði�Þ2RðR 0 þ R 00LH Þ < 0
which implies that
dL
dh
¼ 1
D
Rwði�Þ2R 0 > 0:
The comparative statics for a change in x satisfy
di�
dx
¼ 1
D
að2R 0 þ R 00LH Þ > 0
dLH
dx
¼ 1
D
awði�ÞðR 0 þ R 0LH Þ > 0
which implies that
dL
dx
64. ¼ � 1
D
awði�ÞR 0 < 0:
B.2. Simulation solution
Given the assumption that w(i)¼wi, the deposit rate paid by the
OFC satisfies
rO ¼
r �wi þ ax
hwi
and by (3) OFC lending given i� satisfies
LO ¼
w
2
ðm2 � i�2Þ
so that overall lending satisfies
L ¼ LH þ
w
2
ðm2 � i�2Þ:
Given the functional form for R in (10), the equilibrium
condition for OFC lending given LH
in (4) satisfies:
hwi�ð �R þ R 0LÞ � r �wi� � ax ¼ 0:
65. By (8) the first-order condition of the home country monopoly
bank satisfies
ð �R þ R 0LÞ � r � þ R 0LH ¼ 0:
The above two equations form a system of two equations in two
unknowns, LH and i
�.
Finally, our welfare measure satisfies
W ¼ ð �R � r �ÞL þ 1
2
R 0L2 � ðm � i�Þax:
2007] 1331O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
Table A1
Host Countries in CPIS
Afghanistan Albania Algeria American Samoa Andorra
Angola Anguilla Antigua and Barbuda Argentina* Armenia
Aruba* Australia* Austria* Azerbaijan Bahamas*
Bahrain* Bangladesh Barbados Belarus Belgium*
Belize Benin Bermuda* Bhutan Bolivia
Bosnia and
Herzegovina
Botswana Brazil* British Virgin
66. Islands
Brunei
Darussalam
Bulgaria* Burkina Faso Burundi Cambodia Cameroon
Canada* Cape Verde Cayman Islands* Central African Rep.
Chad
Chile* China Colombia* Comoros Congo
(Zaire/Kinshasa)
Congo (Brazzaville) Cook Islands Costa Rica* Côte d’Ivoire
Croatia
Cuba Cyprus* Czech Republic* Denmark* Djibouti
Dominica Dominican
Republic
Ecuador Egypt* El Salvador
Equatorial Guinea Eritrea Estonia* Ethiopia Falkland Islands
Faeroe Islands Fiji Finland* France* French Guiana
French Polynesia Gabon Gambia Georgia Germany*
Ghana Gibraltar Greece* Greenland Grenada
Guadeloupe Guam Guatemala Guernsey* Guinea
Guinea-Bissau Guyana Haiti Honduras Hong Kong*
Hungary* Iceland* India Indonesia* Iran
Iraq Ireland* Isle of Man* Israel* Italy*
Jamaica Japan* Jersey* Jordan Kazakhstan*
Kenya Kiribati Korea* Kuwait Kyrgyz Republic
Laos Latvia Lebanon* Lesotho Liberia
Libya Liechtenstein Lithuania Luxembourg* Macau*
Macedonia Madagascar Malawi Malaysia* Maldives
Mali Malta* Marshall Islands Martinique Mauritania
Mauritius* Mexico Micronesia Moldova Monaco
Mongolia Montserrat Morocco Mozambique Myanmar
Namibia Nauru Nepal Netherlands* Netherlands Antilles*
67. New Caledonia New Zealand* Nicaragua Niger Nigeria
North Korea Norway* Oman Pakistan* Palau
Panama* Papua New Guinea Paraguay Peru Philippines*
Poland* Portugal* Puerto Rico Qatar Runion
Romania*� Russian Federation* Rwanda St. Helena St. Kitts
and Nevis
St. Lucia St. Pierre &
Miquelon
St. Vincent
& Gren.
Samoa San Marino
São Tome and
Prı́ncipe
Saudi Arabia Senegal Serbia and
Montenegro
Seychelles
Sierra Leone Singapore* Slovak Republic* Slovenia Solomon
Islands
Somalia South Africa* Spain* Sri Lanka Sudan
Suriname Swaziland Sweden* Switzerland* Syrian Arab
Republic
Taiwan Tajikistan Tanzania Thailand* Togo
Tonga Trinidad and Tobago Tunisia Turkey* Turks & Caicos
Islands
Turkmenistan Tuvalu Uganda Ukraine* United Arab Emirates
United Kingdom* United States* Uruguay* Uzbekistan
Vanuatu*
Venezuela* Vietnam Virgin Islands Yemen Zambia
Zimbabwe
68. Note: Source countries also marked with an asterisk.
1332 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
Table A2
Offshore Financial Centres: Default Definition
Caribbean
Aruba Bahamas Barbados Belize
Bermuda Brit. Virgin Islands Cayman Islands Costa Rica
Dominica Neth. Antilles St. Kitts & Nevis Turks and Caicos Is.
Europe
Andorra Cyprus Gibraltar Guernsey
Isle of Man Jersey Liechtenstein Malta
Monaco
East Asia
Hong Kong Macau Malaysia Marshall Islands
Philippines Singapore Thailand
Middle East
Bahrain Israel Kuwait Lebanon
Oman United Arab Emir.
Other
Liberia Mauritius Morocco Panama
Russia Uruguay
Table A3
69. Countries in Multilateral Data Sample
Afghanistan Albania Algeria American Samoa Andorra
Angola Anguilla Antigua & Barbuda Argentina Armenia
Aruba Australia Austria Azerbaijan Bahamas
Bahrain Bangladesh Barbados Belarus Belgium
Belize Benin Bermuda Bhutan Bolivia
Bosnia &
Herzegovina
Botswana Brazil British Virgin
Islands
Brunei
Darussalam
Bulgaria Burkina Faso Burundi Cambodia Cameroon
Canada Cape Verde Cayman Islands Central African Rep. Chad
Chile China Colombia Comoros Congo
Cook Islands Costa Rica Cote d’Ivoire Croatia Cuba
Cyprus Czech Rep Denmark Djibouti Dominica
Dominican Rep Ecuador Egypt El Salvador Eq. Guinea
Eritrea Estonia Ethiopia Falkland Islands Faeroe Islands
Fiji Finland France French Guiana French Polynesia
Gabon Gambia Georgia Germany, West Ghana
Gibraltar Greece Greenland Grenada Guadeloupe
Guam Guatemala Guernsey Guinea Guinea-Bissau
Guyana Haiti Honduras Hong Kong Hungary
Iceland India Indonesia Iran Iraq
Ireland Isle of Man Israel Italy Jamaica
Japan Jersey Jordan Kazakhstan Kenya
Kiribati Korea Kuwait Kyrgyz Republic Laos
Latvia Lebanon Lesotho Liberia Libya
Liechtenstein Lithuania Luxembourg Macau Macedonia (FYR)
Madagascar Malawi Malaysia Maldives Mali
70. Malta Marshall Islands Martinique Mauritania Mauritius
Mexico Micronesia Moldova Monaco Mongolia
Montserrat Morocco Mozambique Myanmar (Burma) Namibia
Nauru Nepal Netherlands Netherlands Antilles New Caledonia
New Zealand Nicaragua Niger Nigeria Niue
2007] 1333O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007
University of California, Berkeley
Federal Reserve Bank of San Francisco
Submitted: 9 May 2005
Accepted: 23 June 2006
References
Alworth, J. S. and Andresen, S. (1992). �The determinants of
cross-border non-bank deposits and the com-
petitiveness of financial market centres�, Money Affairs, vol.
2, pp. 105–33.
Barth, J. R., Caprio, G. Jr. and Levine, R. (2001). �Bank
regulation and supervision: what works best�, available
at http://econ.worldbank.org/files/2733_wps2725.pdf.
Claessens, S. and Laeven, L. (2004). �What drives bank
competition? Some international evidence�, Journal of
Money, Credit, and Banking, vol. 36(3), pp. 563–83.
Coates, N. and Rafferty, M. (2006). �Offshore financial
centres, hot money and hedge funds: a network
71. analysis of international capital flows�, in (L. Assassi, D.
Wigan and A. Nesvetailova, eds.), Global Finance in
the New Century: Beyond Deregulations, Basingstoke: Palgrave
Macmillan.
Demirgüç-Kunt, A. and Levine, R. (2001). Financial Structure
and Economic Growth, Cambridge: MIT Press.
Errico, L. and Musalem, A. (1999). �Offshore banking: an
analysis of micro- and macro-prudential issues�, IMF
Working Paper 99/5.
Glick, R. and Rose, A. K. (2002). �Does a currency union
affect trade?�, European Economic Review, vol. 46(6),
pp. 1111–23.
Hampton, M. P. and Christensen, J. (2002). �Offshore pariahs?
Small island economies, tax havens, and the
reconfiguration of global finance�, World Development, vol.
30(9), pp. 1657–73.
Hines, J. R., and Rice, E. M., (1994). �Fiscal paradise: foreign
tax havens and American business�, Quarterly
Journal of Economics, vol. 109(1), pp. 149–82.
Huizinga, H. and Nielsen, S. B. (2002). �Withholding taxes or
information exchange: the taxation of inter-
national interest flows�, Journal of Public Economics, vol. 87,
pp. 39–72.
IMF (2004) author to complete p. 8
Kaufmann, D., Kraay, A. and Mastruzzi, M. (2003).
�Governance matters III�, World Bank Policy Research
Working Paper No. 3106.
Lane, P. R. and Milesi-Ferretti, G. M. (2004). �International
investment patterns�, IMF Working Paper WP/04/
72. 134.
Levine, R., Loayza, N. and Beck, T. (2000). �Financial
intermediation and growth: causality and causes�, Journal
of Monetary Economics, vol. 46(1), pp. 31–77.
Table A3
Continued
North Korea Northern Mariana
Islands
Norway Oman Pakistan
Palau Panama Papua New Guinea Paraguay Peru
Philippines Poland Portugal Puerto Rico Qatar
Reunion Romania Russia Rwanda San Marino
Sao Tome and
Principe
Saudi Arabia Senegal Serbia/Ex-Yugoslavia Seychelles
Sierra Leone Singapore Slovakia Slovenia Solomon Islands
Somalia South Africa Spain Sri Lanka St. Helena
St. Kitts & Nevis St. Pierre & Miquelon St. Lucia St. Vincent &
Grens. Sudan
Suriname Swaziland Sweden Switzerland Syria
Taiwan Tajikistan Tanzania Thailand Togo
Tonga Trinidad & Tobago Tunisia Turkey Turkmenistan
Turks and Caicos
Islands
Tuvalu UK US Virgin Islands Uganda
73. Ukraine United Arab Emirates United States Uruguay
Uzbekistan
Vanuatu Venezuela Vietnam Western Samoa Yemen
Zaire Zambia Zimbabwe
1334 [ O C T O B E RT H E E C O N O M I C J O U R N A L
� The Author(s). Journal compilation � Royal Economic
Society 2007
Masciandaro, D. (2005). �False and reluctant friends?: national
money laundering regulation, international
compliance and non-cooperative countries�, European Journal
of Law & Economics, vol. 20(1), pp. 17–30.
Organization for Economic Cooperation and Development.
(2000). Improving Access to Bank Information for
Tax Purposes, Paris: OECD.
Organization for Economic Cooperation and Development.
(2004). The OECD’s Project on Harmful Tax Prac-
tices: The 2004 Progress Report, Paris: OECD.
Portes, R. and Rey, H. (2005). �The determinants of cross-
border equity flows�, Journal of International
Economics, vol. 65, pp. 269–96.
2007] 1335O F F S H O R E F I N A N C I A L C E N T R E S
� The Author(s). Journal compilation � Royal Economic
Society 2007