Can authorities curtail falsified trade & investment data that hide capital movements? Evidence from flows between BRICS and the USA

IF 3.5 2区 经济学 Q1 ECONOMICS Journal of Policy Modeling Pub Date : 2023-09-01 DOI:10.1016/j.jpolmod.2023.09.001
Subhasish Das , Amit K. Biswas
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Abstract

Usually developing and transitional countries are characterised by foreign exchange and capital scarcities and hence resort to stringent trade and capital control policies. This might become counterproductive and provide incentives to the international traders and investors to go for corrupt practices. This paper investigates how do these tight policies might encourage illegal or hidden capital movements across borders. By presenting both a theoretical and an empirical analysis, where traders and investors rationally misreport to evade stringent trade and investment barriers, we first show that illegal capital outflow takes place through trade misreporting and interestingly, export and import misreporting are cointegrated. Secondly and more importantly illegal capital inflow might take place through overreporting of FDI values and illegal capital outflow and inflow are cointegrated too. Based on the thorough investigation of the BRICS – USA bilateral trade and FDI data, we propose that a less regulated trade and investment regime might benefit these countries more as tight and restrictive policies seem to be self-defeating. Our study comes up with policy conclusions that might minimise the cross-border illegal capital movements.

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当局能否遏制隐藏资本流动的伪造贸易和投资数据?金砖国家与美国资金流动的证据
通常发展中国家和转型期国家的特点是缺乏外汇和资本,因此采取严格的贸易和资本管制政策。这可能会适得其反,并为国际贸易商和投资者提供腐败行为的动机。本文探讨了这些紧缩政策如何可能鼓励非法或隐藏的跨境资本流动。通过提出理论和实证分析,交易者和投资者理性误报以逃避严格的贸易和投资壁垒,我们首先表明,非法资本外流是通过贸易误报发生的,有趣的是,出口和进口误报是协整的。其次,更重要的是,非法资本流入可能通过虚报FDI价值发生,非法资本流出和流入也是协整的。根据对金砖国家与美国双边贸易和外国直接投资数据的全面调查,我们建议,监管较少的贸易和投资制度可能会使这些国家受益更多,因为紧缩和限制性政策似乎是弄巧成的。我们的研究得出的政策结论可能会最大限度地减少跨境非法资本流动。
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来源期刊
CiteScore
6.20
自引率
11.40%
发文量
76
期刊介绍: The Journal of Policy Modeling is published by Elsevier for the Society for Policy Modeling to provide a forum for analysis and debate concerning international policy issues. The journal addresses questions of critical import to the world community as a whole, and it focuses upon the economic, social, and political interdependencies between national and regional systems. This implies concern with international policies for the promotion of a better life for all human beings and, therefore, concentrates on improved methodological underpinnings for dealing with these problems.
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