Open Economies Review

, Volume 23, Issue 5, pp 891–910

Determinants of Trade Misinvoicing


    • National Institute of Public Finance and Policy
  • Abhijit Sen Gupta
    • Jawaharlal Nehru University
  • Ajay Shah
    • National Institute of Public Finance and Policy

DOI: 10.1007/s11079-011-9214-4

Cite this article as:
Patnaik, I., Sen Gupta, A. & Shah, A. Open Econ Rev (2012) 23: 891. doi:10.1007/s11079-011-9214-4


Trade misinvoicing should be seen as an element of de facto capital account openness. Traditional explanations for trade misinvoicing—high custom duties and weak domestic economies—are less persuasive in a world of high growth emerging markets that have low trade barriers. We construct a 53-country data set over a 26 year span, covering both industrialized and developing countries, to study the phenomena of export and import misinvoicing. Capital account openness, differentials in interest rates, political stability, corruption, indebtedness and the exchange rate regime are identified as factors related to misinvoicing.


Trade Misinvoicing Capital controls Capital account openness Political stability Custom duties

JEL codes

F14 F32 F41 F43

Copyright information

© Springer Science+Business Media, LLC 2011