Share:


The Ukrainian economy offshoring: estimation of factors’ impact and developing measures to combat

    Volodymyr Hobela   Affiliation
    ; Olha Podra   Affiliation
    ; Bogdan Batyuk Affiliation
    ; Halyna Levkiv Affiliation
    ; Oksana Hynda Affiliation

Abstract

The study is devoted to the Ukrainian capital outflow analysis, finding main reasons, consequences and working out the recommendations. The purpose of the study was to research the reasons of offshoring, except tax avoidance, to estimate their impact on the state economy and develop the ways of economy de-offshoring based on the main results of the study. The main reasons, positive, negative effects and threats of economy offshoring were identified. The main reasons for offshoring other than tax avoidance were highlighted. Based on empirical, theoretical, and static research, it was found that a corporate raiding, an imperfect legal environment regarding the protection of property, intellectual property and high level of political risks have a significant impact on the economy offshoring. The influence of various factors (x1, x2….xn) on capital outflow was estimated on a base of correlation analysis. According to the received results the main ways of Ukraine’s economy de-offshoring within the formation of institutional and legal support of de-offshoring were developed. Scientific methods such as general and special methods of cognition, methods of economic and statistical analysis, deduction, and the method of theoretical generalization were used in the study.

Keyword : offshore haven, capital, investments, de-offshoring, international financial markets

How to Cite
Hobela, V., Podra, O., Batyuk, B., Levkiv, H., & Hynda, O. (2022). The Ukrainian economy offshoring: estimation of factors’ impact and developing measures to combat. Business: Theory and Practice, 23(2), 347–356. https://doi.org/10.3846/btp.2022.14509
Published in Issue
Sep 15, 2022
Abstract Views
67
PDF Downloads
34
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Alstadsæter, A., Johannesen, N., & Zucman, G. (2018). Who owns the wealth in tax havens? Macro evidence and implications for global inequality. Journal of Public Economics, 162, 89–100. https://doi.org/10.1016/j.jpubeco.2018.01.008

Apostol, O., & Pop, A. (2019). 'Paying taxes is losing money’: A qualitative study on institutional logics in the tax consultancy field in Romania. Critical Perspectives on Accounting, 58, 1–23. https://doi.org/10.1016/j.cpa.2018.05.001

Argilés-Bosch, J. M., Ravenda, D., & Garcia-Blandón, J. (2020). E-commerce and labour tax avoidance. Critical Perspectives on Accounting, 81, 102202. https://doi.org/10.1016/j.cpa.2020.102202

Brizi, A., Giacomantonio, M., Schumpe, B. M., & Mannetti, L. (2015). Intention to pay taxes or to avoid them: The impact of social value orientation. Journal of Economic Psychology, 50, 22–31. https://doi.org/10.1016/j.joep.2015.06.005

Cabral, R., Mollick, A. V., & Saucedo, E. (2018). Foreign direct investment in Mexico, crime, and economic forces. Contemporary Economic Policy, 37(1), 68–85. https://doi.org/10.1111/coep.12401

Chernomaz, P. O., & Subachieva, I. S. (2016). Offshorization of the economy as an economic category. In Current Issues of the World Economy and International Economic Relations: Proceedings of the XI Scientific-Practical Conference of Young Scientists (pp. 365–370). V. N. Karazin Kharkiv National University.

Di Mauro, C., Fratocchi, L., Orzes, G., & Sartor, M. (2018). Offshoring and backshoring: A multiple case study analysis. Journal of Purchasing and Supply Management, 24(2), 108–134. https://doi.org/10.1016/j.pursup.2017.07.003

Fеve, P., Moura, A., & Pierrard, O. (2019). Shadow banking and financial regulation: A small-scale DSGE perspective. Journal of Economic Dynamics and Contro, 101, 130–144. https://doi.org/10.1016/j.jedc.2019.02.001

Goel, R. K., Saunoris, J. W., & Schneider, F. (2018). Growth in the shadows: Effect of the shadow economy on U. S. economic growth over more than a century. Contemporary Economic Policy, 37(1), 50–67. https://doi.org/10.1111/coep.12288

Global Financial Integrity. (2020). Global Financial Integrity (GFI) is Washington, DC-based think tank focused on illicit financial flows, corruption, illicit trade and money laundering. https://gfintegrity.org/

Gupta, R., & Makena, P. (2020). Why must it always be so Real with tax evasion? The Quarterly Review of Economics and Finance, 78, 304–308. https://doi.org/10.1016/j.qref.2020.04.006

Hendrikse, R., & Fernandez, R. (2019). Offshore finance: How capital rules the world. In The Routledge International Hadbook of financialization. Routledge. https://doi.org/10.4324/9781315142876-19

Karlin, M., & Borysiuk, O. (2016). Financial offshore: a textbook. Vezha-Druk.

Kostyuk, B. (2016). Offshorization of Ukraines economy. What shall we do? https://www.radiosvoboda.org/a/27667157.html

Kottaridi, C., Giakoulas, D., & Manopoulos, D. (2019). Escapism FDI from developed economies: The role of regulatory context and corporate taxation. International Business Review, 28(1), 36–47. https://doi.org/10.1016/j.ibusrev.2018.06.004

Lebid, O., & Harkusha, V. O. (2019). Features of offshore zones and their role in the system of world financial centers. Business Inform, 11(502), 290–296. https://doi.org/10.32983/2222-4459-2019-11-290-296

Lensink, R., Hermes, N., & Murinde, V. (2000). Capital flight and political risk. Journal of International Money and Finance, 19(1), 73–92. https://doi.org/10.1016/S0261-5606(99)00034-0

Lutsenko, I. S. (2015). Methodical approach to assessing the level of tax security of the state. Scientific Bulletin of Kherson State University, 12, 159–163.

Lutsyshyn, Z., Yuzhanina, N., Frolova, T., Mazur, M., & Perebyynis, D. (2019). Modern offshore business in the context of national fiscal security. Journal of International Economic Policy, 1(30), 70–112. https://doi.org/10.33111/iep.2019.30.04

National Bank of Ukraine. (2019). Statistics at the National Bank of Ukraine. https://bank.gov.ua/ua/statistic

OECD. (2020). Multilateral convention to implement tax treaty related measures to prevent BEPS. https://www.oecd.org/tax/treaties/multilateral-convention-to-implement-tax-treaty-related-measures-to-prevent-beps.htm

Podra, O., Levkiv, H., Koval, G., Petryshyn, N., & Bobko, U. (2020). The impact of migration processes on the economy of Ukraine: Trends, reasons, consequences. Journal of the Geographical Institute “Jovan Cvijić” SASA, 70(2), 171–179. https://doi.org/10.2298/IJGI2002171P

Redzyuk, Ye. V. (2015). Offshorization of the world economy: Prospects for Ukraine and the world. Bulletin of the Association of Doctors of Philosophy of Ukraine, 11.

Sikka, P., & Willmott, H. (2010). The dark side of transfer pricing: Its role in tax avoidance and wealth retentiveness. Critical Perspectives on Accounting, 21(4), 342–356. https://doi.org/10.1016/j.cpa.2010.02.004

State Statistics Service of Ukraine. (2021). State statistics service of Ukraine. http://www.ukrstat.gov.ua

Tax Justice Network. (2021). Global rankings. Corporate Tax Haven Index 2021. https://iff.taxjustice.net/#/profile/UKR

Tax Justice Network. (2018). Illicit financial flows vulnerability tracker. https://iff.taxjustice.net/#/

The Boston Consulting Group. (2020). The future of wealth management – A CEO agenda. https://web-assets.bcg.com/37/f8/5f033c4b451084efda22ee34998d/bcg-global-wealth-2020-jun-2020.pdf

Varnalii, Z. S. (2018). Offshorization is an institutional threat to Ukraine’s national economic security and statehood. In Public management of Ukraine’s economy in the face of threats to statehood: A collection of Panel discussions materials. KNEU.

Vyhovska, L. (2015). Half a brillion hryvnias. http://nv.ua/ukr/publications/timur-hromajev-golova-nktspfr-71149.html