Estimating the magnitude of capital flight due to abnormal pricing in international trade: The Russia-USA case

Maria E. De Boyrie, Simon J. Pak, John S. Zdanowicz

Research output: Contribution to journalArticle

23 Scopus citations

Abstract

Governmental and international lending agencies, as well as private sector firms, who engage in international trade, have long been concerned with detecting and determining the magnitude of abnormal pricing in international trade. To detect such abnormal pricings, we present a framework analyzing millions of import/export transactions between the U.S. and Russia. The objectives of this study are to estimate the economic impact of over-invoiced/under-invoiced Russian imports/exports from/to the U.S. and to determine if capital movement/capital flight through trade is due to money laundering, tax evasion or some sort of portfolio consideration. Our results lead us to conclude that capital movement through trade in this case can be attributed to either money laundering and/or tax evasion.

Original languageEnglish (US)
Pages (from-to)249-270
Number of pages22
JournalAccounting Forum
Volume29
Issue number3 SPEC. ISS.
DOIs
StatePublished - Sep 2005

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance

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