Ultimate Beneficial Ownership Disclosure Regulation and the Real effects of Investment: A Cross-Country Analysis
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Date
2023-03-24
Authors
Berry, Erica
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
In this study, I examine whether laws mandating disclosure of ultimate beneficial ownership of entities influence outbound foreign direct investment activities. The secrecy provided by anonymous companies allows the individuals controlling a company to be obscured, a factor that can be used to hide improper or illicit activity. I take advantage of the staggered enactment of laws in countries that require disclosure of beneficial owners to assess whether firms change their foreign direct investment behavior in response to increased transparency. I find limited evidence that, on average, firms reduce their outbound foreign direct investment behavior in response to ultimate beneficiary ownership disclosure laws. However, in a cross-sectional analysis, I find that the level of perceived corruption, the existence of country-by-country reporting requirements, and location as a known tax haven affect how firm investment changes upon enactment of laws mandating disclosure of ultimate beneficial ownership.
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Keywords
beneficial ownership, corruption, FCPA, investment, transparency, UKBA