Exploring the motivations of using companies registered in tax havens to invest in UK housing market

Abstract

Purpose

The study is intended to identify the macroeconomic factors that drive the use of companies registered in tax havens to purchase properties in the UK housing market.

Design/methodology/approach

Adopts an empirical study that uses Cointegration and Vector Autoregressive models to identify the influence or the motivations of using tax havens regime and its relationship with investment volume by analysing impulse responses of innovations to external and domestic factors.

Findings

The model uses monthly data for the period 1996–2019. This provides sufficient evidence that offshore buyers are particularly motivated by exchange values and the quality of governance in host economies.

Research limitations/implications

There is much to be revealed from the spatial distribution of this phenomena and the welfare effect at the micro-level.

Originality/value

To the best of my knowledge there is limited to no empirical study that primarily focus on the use of tax haven as an offshore investment tool in the UK housing market. The study also uses new dataset, Overseas Companies Ownership Dataset in the UK to understand housing ownership patterns by companies that are registered abroad dubbed, offshore buyers.

Citation

Agyenim-Boateng, C. (2022), "Exploring the motivations of using companies registered in tax havens to invest in UK housing market", Journal of Economic Studies, Vol. 49 No. 5, pp. 773-792. https://doi.org/10.1108/JES-12-2020-0602