Expropriations, property confiscations and new offshore entities: evidence from the Panama Papers

Ralph-C. Bayer, Roland Hodler, Paul A. Raschky, Anthony Strittmatter

Research output: Contribution to journalArticleResearchpeer-review


We study a motive for why individuals may hide wealth in offshore entities that has received scant attention in the academic literature and the public debate: the fear of expropriation. We use the Panama Papers and data on media reporting on expropriations and property confiscations. We document that such news reports increase the probability that offshore entities are incorporated by agents from the same country in the same month. This result is robust to the use of country-year- and month-fixed effects and the exclusion of tax havens. The effect is stronger in countries with well-functioning governments. We argue that individuals start hiding their proceeds from illegal activities in offshore entities when reasonably well-intended and well-functioning governments become more serious about law enforcement.

Original languageEnglish
Pages (from-to)132-152
Number of pages21
JournalJournal of Economic Behavior and Organization
Publication statusPublished - Mar 2020


  • Expropriations and confiscations
  • Offshore entities
  • Panama Papers
  • Tax havens

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