The gravity of Offshore Financial Centers: Estimating real FDIs using a binary choice model

Marco Albori, Alessio Anzuini, Fabrizio Ferriani, Luca Rossi
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Abstract

Fiscal and regulatory arbitrage opportunities in Offshore Financial Centers (OFCs) materially distort the economic analysis based on cross-border capital flows. However, despite its significance, there is limited information on the true scale of this phenomenon. This paper focuses on Foreign Direct Investments (FDIs) and fills this gap by using an extensive list of FDIs determinants and estimating a gravity-like binary choice specification to assess how much bilateral FDIs are driven by economic integration motives versus profit shifting opportunities. We find that the share of so-called phantom FDIs, after rising in 2010–15, stabilized at around 40% of total FDIs in recent years and that this share is systematically larger in OFCs, reconciling available evidence on the abnormal amount of recorded FDIs in these countries.

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离岸金融中心的引力:利用二元选择模型估算实际外国直接投资
离岸金融中心(OFCs)的财政和监管套利机会严重扭曲了基于跨境资本流动的经济分析。然而,尽管这一现象十分重要,但有关其真实规模的信息却十分有限。本文以外商直接投资(FDI)为重点,通过使用大量的外商直接投资决定因素清单和类似重力的二元选择规范估算来评估双边外商直接投资在多大程度上受经济一体化动机和利润转移机会的驱动,从而填补了这一空白。我们发现,所谓 "幽灵外国直接投资 "的份额在 2010-15 年间有所上升,近年来稳定在外国直接投资总额的 40% 左右,而且这一份额在开放式金融中心系统性地更大,这与这些国家记录的外国直接投资异常数额的现有证据相吻合。
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来源期刊
International Economics
International Economics Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)
CiteScore
6.30
自引率
0.00%
发文量
74
审稿时长
71 days
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