Determinants of Trade Misinvoicing
Determinants of Trade Misinvoicing, Ila Patnaik, Abhijit Sen Gupta, Ajay Shah. Open Economies Review, Volume 23, Issue 5, page 891-910, November 2012.
Traditional explanations for trade misinvoicing -- high custom duties and weak domestic economies - are less persuasive in a world of high growth emerging markets who have low trade barriers. We construct a 35- country data set over a 26 year span, covering both industrialised and developing countries, to study the phenomena of export and import misinvoicing. Capital account openness, differentials in interest rates, political stability, corruption, indebtedness and the exchange rate regime are identified as factors related to misinvoicing. Trade misinvoicing should be seen as one element of de facto capital account openness.
- Journal PDF (personal use only)
- RePEc page
- Dataset of misinvoicing measures
- Documentation of dataset
- Trade misinvoicing as a channel for capital account openness by Ajay Shah, on his blog, 20th December 2012.
- Watch out for capital flows via trade by Ila Patnaik, in the Financial Express, 20th December 2012.