A cross-country analysis of o shore wealth determinants

Abstract

In this work, I investigate what are the elements that are associated with the amount of individual financial wealth held offshore by a country. To do so, I exploit a novel dataset constructed by Alstadsaeter, Johannesen and Zucman (2018) which contains cross-country estimates of financial wealth that individuals held in tax havens in 2007. The results from the static cross-country analysis show that the level of sociopolitical stability in a country and the level of its financial freedom are negatively associated with the share of wealth that its citizens hold in offshore centres. On the other hand, the level of income inequality and the level of financial openness are positively associated with a country's offshore wealth accumulation dynamics. Arab Gulf region, finally, forms a distinct cluster of countries which show peculiar offshore wealth accumulation characteristics.