Capital Flight and the Economic Growth: Evidence from Nigeria

Lawal, Adedoyin Isola; Kazi, Kelechi Promise; Adeoti, Johnson Olabode; Osuma, Godswill Osagie; Akinmulegun, Sunday Ojo; Ilo, Bamidele M.

doi:10.21512/bbr.v8i2.2090

Cited by 17 publications

(17 citation statements)

References 28 publications

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“…Some even argue that capital flight has no significant effect on economic growth. The study by Lawal et al (2017) examined the impact of capital flight and its determinants on the Nigerian economy between 1981 and 2015, using the auto regressive distributed lag (ARDL) model. Findings revealed that there is existence of a long-run relationship between the variables.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Many empirical studies have examined the nexus between capital flight and economic growth across countries (Lawal et al, 2017;Akinwale and Obagunwa, 2017). Only few studies have examined the relationship between capital flight and economic development (Lan et al, 2010;Liew et al, 2016;Cheung and Qian, 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The works of Lan et al (2010), Liew et al (2016), and Cheung and Qian (2010) were conducted in China and Malaysia, respectively, and applying their findings to Nigeria might be very difficult. Most of the studies conducted in Nigeria examined either the capital flight-economic growth nexus, capital flight-poverty nexus, or capital flight-inequality nexus (Lawal, et al, 2017;Ajayi, 2012;Onyele and Nwokocha, 2016;Aderoju, 2017;Raheem and Adeniyi (2015). To the best of knowledge, no known study has investigated the nexus between capital flight and economic development in Nigeria.…”

Section: Literature Reviewmentioning

confidence: 99%

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Capital Flight and Economic Development: Evidence from Nigeria

Akinwale¹

2020

Management and Economics Research Journal

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This study examined the nexus between capital flight and economic development in Nigeria. The null hypothesis was that capital flight has no significant relationship with economic development in Nigeria. The study used the auto regressive distributed lag (ARDL) method on data obtained from the Central Bank of Nigeria and the World Bank, for the period 1986–2018, to examine the relationship between capital flight and economic development in Nigeria. The study examined the unit root problem and cointegrating properties of the data. The unit root problem was tested for by using the augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests. Findings from ARDL showed an inverse relationship exists between capital flight, real exchange rate, and economic development. This implies that the variables contributed significantly to reduce economic development within the study period. However, a positive relationship existed between economic development and adult literacy rate in Nigeria. By implication, improvements made in providing quality and affordable education tend to have a positive impact on economic development in Nigeria. The study concluded that economic development is strongly influenced by capital flight, real exchange, and adult literacy rates in Nigeria. The study, therefore, recommends that government policies to curb capital flight should be introduced and monitored so as to lead to economic development in Nigeria.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Capital Flight and Economic Development: Evidence from Nigeria

Akinwale¹

2020

Management and Economics Research Journal

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“…The impact of the devaluation of currency on the economic behaviour of nations has remained a subject of hot debate that is inconclusive. Some scholars have documented the existence of positive impact of devaluation on economic growth (Tang & Zhang, 2012;Alston & Mueller, 2016;Doan & Gente, 2014;Lawal et al, 2017). Meanwhile, the others have noted the different result (Addison & Baliamoune-Lutz, 2017;Damania, Russ, Wheeler, & Bara, 2018;Lawal, Nwanji, Asaleye, & Ahmed, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…It resulted in import intensity, distribution costs, the income level of destination countries, and foreign ownership playing significant roles. For more reference, see Berman, Martin, and Mayer (2012); Burstein and Gopinath (2014); Tang and Zhang (2012); Alston and Mueller (2016); Doan and Gente (2014); Bodart, Candelon, and Carpantier (2015); Bordo, Choudhri, Fazio, and MacDonald, (2017); Bouvet, Ma, and Van Assche (2017); Chen, Choi, and Devereux (2015); Chen, and Juveral, (2016); Dellas and Tavlas (2013); Katusiime, Shamsuddin, and Agbola (2015); Mueller and Mueller (2016), Lawal et al, (2017); Adedoyin, Babalolam, Otekunri, and Adeoti (2016).…”

Section: Introductionmentioning

confidence: 99%

Does Exchange Rate Devaluation Affect Agricultural Output? Evidence from Nigeria

Oye

Lawal

Eneogu

et al. 2018

Binus Business Review

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The purpose of this research was to examine the effect of exchange rate devaluation on agricultural output in Nigeria. This investigation used the available time series data of 30 years (1986-2016) from the Central Bank of Nigeria (CBN) Statistical Bulletin and the National Bureau of Statistics. Moreover, the real effective exchange rate was used as the proxy for currency devaluation and Consumer Price Index (CPI) was used as a proxy for inflation. Other variables were Agricultural Gross Domestic Product (AGDP), Price of Export (PEXP), and Real Agricultural Exports (RAEXP). The research through the Augmented Dickey Fuller (ADF) and Philip Perron’s unit root tests find that the variables used in the model are integrated in the same order. Using the Johansen’s cointegration test results show that the variables are cointegrated. The results of the Vector Error Correction Model (VECM) indicates that a percent increase in the Real Effective Exchange Rate (REER), a proxy for devaluation. It will lead to a decrease in gross agricultural output. This implies that total agricultural output responds negatively to exchange rate devaluation. The result of the causality test by Toda and Yamamoto reveals that a unidirectional causality exists between real effective exchange rate and price of exports. This shows that a significant relationship exists between exchange rate devaluation and gross exports earnings. It reveals that the past values of the price of exports can be used to predict the current values of agricultural output.

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Fighting capital flight in Nigeria: have we considered global uncertainties and exchange rate volatilities? Fresh insights via quantile ARDL model

Uche

Effiom

2021

SN Bus Econ

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This study aims to fill the observed gap in the literature related to capital flight and its determinants. Following this observation, the main objective of the current effort is to unravel the potential influence of global economic policy uncertainties and exchange rate deviations on capital flight. Annual time series data between 1970 and 2015 were used for empirical investigations through the application of the newly introduced quantile autoregressive distributed lag model. Following this extensive investigation, the following evidence emerged. A long-run relationship exists between global economic uncertainties, exchange rate volatilities, and capital flight in Nigeria. Second, we discover that the effects of exchange rate volatility and global uncertainty are sensitive to different quantiles of capital flight distributions. Third, capital flight shows strong evidence of hysteresis in all quantiles. This makes capital flight a systemic problem as past capital flight induces more capital flight. In addition, we found evidence of long-run distributional asymmetric effects between the past values of capital flight and that of economic growth on capital flight. In addition, exchange rate and GDP, rather than global uncertainty are the major determinants of capital flight in Nigeria in terms of their significant positive long-term impacts on capital flight in all quantiles of capital flight distributions. Therefore, if the fight against capital migration must be won in Nigeria and other countries facing similar challenges, stabilization of the exchange rate, among other things is paramount. In addition, due to the presence of distributional asymmetric effects, a one-size-fits all policy may not be helpful. The overall findings have strong policy implications for the fight against capital flight.

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Capital Flight and the Economic Growth: Evidence from Nigeria

Cited by 17 publications

References 28 publications

Capital Flight and Economic Development: Evidence from Nigeria

Capital Flight and Economic Development: Evidence from Nigeria

Does Exchange Rate Devaluation Affect Agricultural Output? Evidence from Nigeria

Fighting capital flight in Nigeria: have we considered global uncertainties and exchange rate volatilities? Fresh insights via quantile ARDL model

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