Do Treasure Islands Create Firm Value?

Tat-kei Lai, Travis Ng

Research output: Contribution to conferencePaperResearchpeer-review


They do! Otherwise, their use would not have been so prevalent among firms. How
much firm value they create, however, is still an open question. Exploiting a political
event in the U.K. that suddenly raised the cost of using tax havens, we find that
there was a 0.87% reduction in cumulative abnormal return (CAR) among the sampled
firms, corresponding to about £532 million in market capitalization. The firms
of stronger corporate governance registered a stronger reduction in CAR. A simple
linear extrapolation suggests that the firm value contributed by tax havens can be as
much as £31 billion.
Original languageEnglish
Publication date30 Sept 2014
Number of pages37
Publication statusPublished - 30 Sept 2014
EventThe 2014 Meeting of the Canadian Law and Economics Association - University of Toronto, Toronto, Canada
Duration: 19 Sept 201420 Sept 2014


ConferenceThe 2014 Meeting of the Canadian Law and Economics Association
LocationUniversity of Toronto
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