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What determines tax havens? A historical investigation of tax haven factors

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  • A Hartfield
  • C Liu
  • M H Sheikh

Abstract

This paper analyses the determining factors of tax haven status by investigating the factors from a historical perspective. Initially, we use tax variables, governance variables and a communication indicator to check if these factors can distinguish tax haven countries from non-tax havens, based on two data sets in 2006 and 2018. We apply principal component analysis combined with Welch’s t-test and logit model analysis. We find that collectively, the historical tax haven factors are outdated for 2018 data. Individually, historical tax haven criteria are not significant in explaining tax haven status, and alternative criteria and variables, such as the financial secrecy score, are required.

Suggested Citation

  • A Hartfield & C Liu & M H Sheikh, 2024. "What determines tax havens? A historical investigation of tax haven factors," Economic Issues Journal Articles, Economic Issues, vol. 29(2), pages 29-56, September.
  • Handle: RePEc:eis:articl:224hartfield
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    References listed on IDEAS

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    More about this item

    Keywords

    historical criteria; tax havens; principal component analysis; Welch’s test; logit models;
    All these keywords.

    JEL classification:

    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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