Determinants Of Capital Flight From Beautiful Places: The Case Of Small Open Economy Of Trinidad And Tobago

Salandy, Michelle; Henry, Lester

doi:10.1353/jda.2018.0053

Cited by 8 publications

(11 citation statements)

References 19 publications

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“…The results show that a one percentage point increase in external debt will cause capital flight to increase by 0.61%. The finding is in line with the empirical result of Salandy and Henry (2018) and Anetor (2019). The result also confirms a negative relationship between financial deepening and capital flight with significant coefficient in the short run.…”

Section: Short-run Ardl Modelsupporting

confidence: 92%

“…Utilizing a combination of the OLS and the generalized method of moments (GMM) estimation techniques, Salandy and Henry (2018) examines the determinants of capital flight in Trinidad and Tobago for the period 1971 and 2011. The empirical finding indicates the key determinants of capital flight are the lagged external debt, lagged capital flight, external debt, GDP growth, interest rate differential, and excess liquidity.…”

Section: Literature Reviewmentioning

confidence: 99%

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Determinants of Capital Flight in Post War Sierra Leone: An Empirical Analysis

Tarawalie

Jalloh²

2021

IJEFI

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The objective of this paper is to investigate the determinants of capital flight in Sierra Leone and the direction of causality between capital flight and key variables, within the context of the autoregressive distributed lag (ARDL) estimation technique and the granger causality framework. The study utilizes quarterly data spanning the period 2000:Q1 to 2019:Q1. The bound test result confirms the existence of cointegration. The long run result reveals that real effective exchange rate, corruption and external debt are the main determinants of capital flight in Sierra Leone. Specifically, the finding indicates that real effective exchange rate, high level of corruption and accumulation of external debt cause an increase in capital flight. Furthermore, the result reveals that lagged capital flight, corruption, external debt and financial deepening are the main drivers of capital flight in the short run. Whilst lagged capital flight, corruption and external debt accumulation increase capital flight, the result reveals that a well-developed financial system reduce capital flight. The finding asserts that any disequilibrium in the model is corrected at the 26% adjustment speed annually. The diagnostic test confirms that the coefficients are stable, given that the CUSUM and CUSUMSQ lie within the critical band. The granger causality test results reveal that, external debt and capital flight exhibits bi-directional causality. However, both inflation and exchange rate demonstrate uni-directional causality, given that these variables granger cause capital flight, with no feedback effect. The study therefore urges the Government to take measures to strengthen the Anti-corruption Commission and the judiciary with a view to intensify the fight against corruption, and reduce capital flight. Also, government should put in place modalities to ensure strict capital controls, deepen the financial market and maintain broad macroeconomic stability as recipe to reduce capital flight.

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Section: Short-run Ardl Modelsupporting

confidence: 92%

Section: Literature Reviewmentioning

confidence: 99%

Determinants of Capital Flight in Post War Sierra Leone: An Empirical Analysis

Tarawalie

Jalloh²

2021

IJEFI

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“…As a result, the null hypothesis (H04), which states that the economic growth rate has no significant impact on capital flight, is rejected. This result is consistent with the empirical studies by Forson et al (2017), Kipyegon (2004, Ljungwall and Zijian (2008) and, Salandy and Henry (2018). The result also found that trade openness has a negative and insignificant relation with capital flight.…”

Section: Order Of Integrationsupporting

confidence: 92%

“…The result noted that the coefficient of interest rate is negative and significant suggesting that economic growth rate determines capital flight in the shortrun; hence, the null hypothesis (H04) is rejected. This result lends credence to the studies of Forson et al (2017), Kipyegon (2004), Ljungwall and Zijian (2008), and Salandy and Henry (2018). It is also noted that the coefficient of external debt is positive and significant thus, indicating that external debt influences capital flight in the short-run.…”

Section: Order Of Integrationsupporting

confidence: 82%

“…The study also concluded that there is a strong positive correlation between interest rate differential and capital flight and between change in external debt and capital flight. Salandy and Henry (2018) examined the determinants of capital flight from Trinidad and Tobago between 1971 and 2011. Using the OLS and the Generalized Method of Moments (GMM) techniques of estimation, the study noted that the major causes of capital flight include the lagged external debt, lagged capital flight, external debt, GDP growth, interest rate differential, and excess liquidity.…”

Section: Literature Reviewmentioning

confidence: 99%

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Macroeconomic Determinants of Capital Flight: Evidence from the Sub-Saharan African Countries

Anetor¹

2019

International Journal of Management, Economics and Social Sciences

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The aim of the study was to examine the macroeconomic determinants of capital flight from the Sub-Saharan African (SSA) countries between the period 1981-2015. The study used secondary data obtained from the World Bank Development Indicators (WDI) and applied the autoregressive distributed lag (ARDL) model technique to determine the macroeconomic factors influencing capital flight from the SSA region. The results of the study showed that economic growth had a significant negative relationship with capital flight in both the long-run and shortrun. Also, the outcome of the study revealed that external debt had a significant positive relationship with capital flight in the short-run. In addition, the study noted that economic variables such as interest rate spread, inflation, and trade openness have no significant influence on capital flight in the SSA region. Overall, the study revealed that economic growth rate and external debt constitute the macroeconomic fundamentals that influence the rate of capital flight from SSA countries.

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Kidnapping rate and capital flight: Empirical evidence from developing countries

Okafor

Ede

2021

Int. J Fin Econ

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This paper contributes to the literature on capital flight by investigating the relationship between kidnapping rate and capital flight in developing countries. Numerous empirical studies exist on the determinants of capital flight but, surprisingly, none of them have investigated the empirical link between kidnapping and capital flight. To fill this existing void in the literature, this paper utilised a sample of 67 developing countries for the period 2003–2017. Estimates of the GMM technique show that kidnapping rate has a positive and significant impact on capital flight. However, estimations of the marginal differences show that this significant effect remained consistent only in the sample of ‘fragile’ developing countries. The results remained consistent to alternative measures of capital flight.

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Determinants Of Capital Flight From Beautiful Places: The Case Of Small Open Economy Of Trinidad And Tobago

Cited by 8 publications

References 19 publications

Determinants of Capital Flight in Post War Sierra Leone: An Empirical Analysis

Determinants of Capital Flight in Post War Sierra Leone: An Empirical Analysis

Macroeconomic Determinants of Capital Flight: Evidence from the Sub-Saharan African Countries

Kidnapping rate and capital flight: Empirical evidence from developing countries

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