Perceptions on jurisdiction risk: a cross-country analysis

What is it about?

Using cross-country regulatory data on the UK financial institutions’ perceptions of jurisdiction risk, this article empirically determines that perceptions of jurisdiction risk is significantly and positively associated with anti-money laundering and countering the financing of terrorism (AML/CFT) framework, as well as with tax burden on business and institutional and legal risk in the case of 165 jurisdictions. The findings lend support to the proposition that unsystematic efforts and too much publicity may ascertain the high-risk image of a jurisdiction, deterring cross-border business. Policy implications that emerge from the article also add to the case for strengthening institutional and legal frameworks, as well as relieving the tax burden on doing business.

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