author={Anne-Laure Delatte and Amélie Guillin and Vincent Vicard},
title={Grey Zones in Global Finance: the Distorted Geography of Cross-Border Investments},
type={Working Papers},
abstract={Tax avoidance schemes generate artificially complex cross-border financial structures inflating measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40% of global assets (FDI, portfolio equity and debt) are `abnormal' – unexplained – stocks. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away.},
keywords={Cross-Border Investments ; Capital Openness ; Tax Havens ; Gravity Equation}