TY - JOUR
T1 - Estimating Trade Misinvoicing from Bilateral Trade Statistics
T2 - The Devil is in the Details
AU - Hong, Keejae P.
AU - Pak, Simon J.
N1 - Publisher Copyright:
© 2016 Taylor & Francis Group, LLC.
PY - 2017/1/1
Y1 - 2017/1/1
N2 - Trade misinvoicing, an important channel of illicit financial flows, is frequently estimated by the partner-country trade data comparison method. However, this method relies on a critical but incorrect assumption that the trade statistics in partner countries exhibit no misinvoicing. This study proves that the assumption of no misinvoicing in partner countries cannot be supported, raising serious doubts about the reliability of the method and a possibility that inappropriate policy decisions may be made based on the erroneous estimates of trade misinvoicing. We introduce an alternative method to estimate trade misinvoicing which does not rely on the trade statistics of partner countries.
AB - Trade misinvoicing, an important channel of illicit financial flows, is frequently estimated by the partner-country trade data comparison method. However, this method relies on a critical but incorrect assumption that the trade statistics in partner countries exhibit no misinvoicing. This study proves that the assumption of no misinvoicing in partner countries cannot be supported, raising serious doubts about the reliability of the method and a possibility that inappropriate policy decisions may be made based on the erroneous estimates of trade misinvoicing. We introduce an alternative method to estimate trade misinvoicing which does not rely on the trade statistics of partner countries.
UR - http://www.scopus.com/inward/record.url?scp=84980009717&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84980009717&partnerID=8YFLogxK
U2 - 10.1080/08853908.2016.1202160
DO - 10.1080/08853908.2016.1202160
M3 - Article
AN - SCOPUS:84980009717
SN - 0885-3908
VL - 31
SP - 3
EP - 28
JO - International Trade Journal
JF - International Trade Journal
IS - 1
ER -