Financial technology innovation impact on trade-based money laundering from environmental crimes: a gravity model approach
This study contributes two significant ways to the literature on trade-based money laundering (TBML). Firstly, we examine TBML dynamics using trade misinvoicing as a proxy, analysing trade data for wood imports and exports between Southeast Asia and various partner economies from 2018 to 2022. Fol...
| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
Faculty of Accountancy, UiTM
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/116506/ http://psasir.upm.edu.my/id/eprint/116506/1/116506.pdf |
| Summary: | This study contributes two significant ways to the literature on trade-based money laundering (TBML). Firstly,
we examine TBML dynamics using trade misinvoicing as a proxy, analysing trade data for wood imports and
exports between Southeast Asia and various partner economies from 2018 to 2022. Following a gravity approach,
our model incorporates economic mass and distance variables. Additionally, we include financial technology
innovation (fintech) as a potential influencing factor, given its increasing prevalence. Secondly, we present an
empirical TBML model that accounts for multiple destinations with Southeast Asia, a region rich in environmental
resources, as the origin. Using Poisson Pseudo Maximum Likelihood (PPML) as the primary estimator, this study
reveals that economic mass, distance (a proxy for trade cost), and fintech innovation significantly impact TBML.
Fintech's effects on TBML vary between origin and destination countries. Mobile payments increase TBML in
origins but decrease it in destinations. Regulatory sandboxes show contrasting effects, reducing TBML in origins
while increasing it in destinations, suggesting varied regulatory effectiveness across jurisdictions |
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