Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259380 
Year of Publication: 
2022
Series/Report no.: 
WIDER Working Paper No. 2022/24
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
Illicit financial flows have recently attracted the attention of academia, practitioners, and multilateral organizations who consider them harmful to economic development. Some observers suggest that many of these flows occur via the misinvoicing of international trade transactions. This study develops a novel methodology based on the gravity model of international trade to estimate illicit financial flows using publicly available product-level international trade data. It contributes to the literature by estimating product-level transportation and insurance costs and providing, for the first time, an estimation for all countries of an upper bound of the values of export and of import over- and under-misinvoicing separately, without resorting to assumptions about trade statistics reliability. Application of the methodology is illustrated using six-digit product-level UN Comtrade data for 2013-16. The results indicate that misinvoicing is not confined to a few products or countries but is a widespread phenomenon that deserves future research.
Subjects: 
gravity model
illicit financial flows
international trade
misinvoicing
transportation and insurance cost
JEL: 
C23
F14
F24
O17
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-155-6
Document Type: 
Working Paper

Files in This Item:
File
Size
511.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.