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Incorporation of offshore shell companies as an indicator of corruption risk in the extractive industries

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  • Giovanna Marcolongo
  • Diego Zambiasi

Abstract

We show that the incorporation of offshore entities increases when oil and gas exploration licences are awarded. We exploit leaked data on the incorporation of shell companies and detailed information on tax havens and the awarding rounds of oil licences to construct a new data set covering 119 countries over the period 1990-2014. We consider the incorporation of offshore entities as an indicator of corruption risk. We find that the number of new shell companies increases by 11.1 per cent in the period around the award of an exploration licence.

Suggested Citation

  • Giovanna Marcolongo & Diego Zambiasi, 2022. "Incorporation of offshore shell companies as an indicator of corruption risk in the extractive industries," WIDER Working Paper Series wp-2022-14, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2022-14
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    References listed on IDEAS

    as
    1. Francesco Caselli & Guy Michaels, 2013. "Do Oil Windfalls Improve Living Standards? Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 208-238, January.
    2. Cust,James Frederick & Mihalyi,David, 2017. "Evidence for a presource curse ? oil discoveries, elevated expectations, and growth disappointments," Policy Research Working Paper Series 8140, The World Bank.
    3. Chang-Tai Hsieh & Enrico Moretti, 2006. "Did Iraq Cheat the United Nations? Underpricing, Bribes, and the Oil for Food Program," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1211-1248.
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    More about this item

    Keywords

    Oil; Extractives; Natural resources; Corruption; Tax havens; Shell companies;
    All these keywords.

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