The costs of moving money across borders and the volume of capital flight: the case of Russia and other CIS countries

Brada, Josef C.; Kutan, Ali M.; Vukšić, Goran

doi:10.1007/s10290-011-0100-3

Cited by 17 publications

(10 citation statements)

References 34 publications

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“…On the other hand, in the seven countries of the Commonwealth of Independent States (1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005), the liberalization of the trade and financial sectors accelerated capital flight by making capital easier to transfer abroad. In the short-term, strengthening supervision rather than liberalization of the external sector seems more likely to combat capital flight (Brada, Kutan, and Vukšić, 2011). However, financial liberalization policies by themselves may not help reduce the capital flight of 21 emerging market economies from 1980 to 2004 (Yalta & Yalta, 2012).…”

Section: Determinants Of Capital Flightmentioning

confidence: 99%

The vulnerable financial issue: Capital flight in Indonesia

Basorudin¹,

Dwi²,

Hartini³

et al. 2021

EurJ Appl Econ

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Indonesia is a developing country with a high demand for capital from both domestic and international sources. However, international capital flows are needed the most. For non-Western countries, especially Indonesia, capital flight is an unfavourable financial problem. This research aims to summarise capital flight from Indonesia and analyse the impact of macroeconomic and non-macroeconomic determinants through capital flight. Macroeconomic determinants include budget deficits, economic growth, inflation rates, and exchange rates. Nonmacroeconomic determinants are the degree of trade openness, interest rate differences, and dummy ratings. The data comes from the Bank of Indonesia, OECD, Moody's, and BPS-Statistics Indonesia. The coverage of this research is the Indonesian quarter from 2010 to 2018. This period complies with the latest procedures of the sixth edition of the Balance of Payments Manual (BPM 6). In this research, the measurement of the capital flight is the World Bank's residual method, trade misinvoicing method, and combined method. This research finds that, compared with other economics, non-macroeconomics is the most influential determinant of capital flight from Indonesia.

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Section: Determinants Of Capital Flightmentioning

confidence: 99%

The vulnerable financial issue: Capital flight in Indonesia

Basorudin¹,

Dwi²,

Hartini³

et al. 2021

EurJ Appl Econ

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show abstract

“…Many studies have been conducted on the relationship between capital flight and macroeconomic variables. Studies such as those by Brada (2011) and Hoa and Lin (2016) found a negative relationship between capital flight and macroeconomic variables, while Aderoju (2017), Saheed and Ayodeji (2012), and Uguru et al, (2014) found a positive relationship. Although most of the reviewed studies focused on the impact of capital flight on economic growth, the effects of capital flight on economic development have not been considered.…”

Section: Introductionmentioning

confidence: 96%

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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“…Furthermore, autocratic countries can implement economic regulation to control the effects of individual stock prices and profits in these securities by lax insider trading laws (Eckard, 2005). For outflows, Brada et al (2011, p. 741) conclude that “government repression and regulation … [are] more effective in combating capital flight” in the Commonwealth of Independent States (CIS) countries. This conclusion is in line with Ghosh (2016), who suggests that autocratic regimes use capital controls to deter money from leaving.…”

Section: Related Literature and Hypothesesmentioning

confidence: 99%

Inequality, autocracy, and sovereign funds as determinants of foreign portfolio equity flows

Kemme

Parikh

Steigner

2021

J of Financial Research

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We identify new country characteristics that influence cross‐border equity flows: income inequality, autocracy, and sovereign wealth funds. Using 149 source countries and 34 Organisation for Economic Co‐operation and Development (OECD) host countries for 2002–2013, we find that OECD host countries receive higher foreign portfolio investment (FPI) inflows from source countries with high income inequality and source countries with a sovereign wealth fund, but lower inflows from autocratic source countries. We argue that concentrated wealth in a society, overseas investments for the benefit of future generations, and political regimes influence FPI. These variables have been understudied though they provide valuable indicators for policy makers and investors. We supplement our core analysis with realistic interactions between these new variables and with the increasing importance of tax havens. Our results hold throughout a variety of robustness checks.

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The costs of moving money across borders and the volume of capital flight: the case of Russia and other CIS countries

Abstract: Capital flight, Illicit money flows, Financial sector liberalization, Russia, Commonwealth of Independent States, E26, F31, F32, P33, P37,

Cited by 17 publications

References 34 publications

The vulnerable financial issue: Capital flight in Indonesia

The vulnerable financial issue: Capital flight in Indonesia

Capital Flight and Economic Development: Evidence from Nigeria

Inequality, autocracy, and sovereign funds as determinants of foreign portfolio equity flows

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