Capital Flight and Economic Development in Africa

Ajayi, S. S.

doi:10.1093/acprof:oso/9780198718550.003.0003

Cited by 10 publications

(12 citation statements)

References 16 publications

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“…Ndiaye () found that amongst other factors, capital flight was driven by public rulers through external debt and aid in the Franc Zone in the period 1970–2005. For the case of Nigeria, Ajayi () did not find any evidence to support the hypothesis that disbursement of external debt influenced capital flight.…”

Section: Empirical Evidence On Fiscal Policy and Capital Flightmentioning

confidence: 92%

“…The primary budget surplus had a negative and statistically significant effect on capital flight in cross‐sectional regressions, but the effect was positive and statistically significant in regressions with pooled annual data. In Nigeria, Ajayi () found a negative relationship between fiscal surplus and capital flight (see also Schineller, ) while Agu () established that government expenditure had a direct impact on capital flight. The effect of the overall deficit/GDP ratio has been found to be statistically insignificant (see Hermes and Lensink, and Boyce, ).…”

Section: Empirical Evidence On Fiscal Policy and Capital Flightmentioning

confidence: 99%

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Fiscal Policy and Capital Flight in Kenya

Muchai¹,

Muchai²

2016

African Development Review

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Capital flight has been an issue of concern for Africa because it reduces the continent's much needed investible funds. In Kenya, the country lost US$ 4.9 billion in real terms from 1970 to 2010 through capital flight. This study seeks to provide fiscal evidence of capital flight in Kenya. The results establish that past capital flight, change in debt, and government expenditure have no significant impact on capital flight in Kenya. However, external debt, taxation, and expenditure practices under different political regimes have significant effects on capital flight. The study discusses policy implications emerging from the empirical results.

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Section: Empirical Evidence On Fiscal Policy and Capital Flightmentioning

confidence: 92%

Section: Empirical Evidence On Fiscal Policy and Capital Flightmentioning

confidence: 99%

Fiscal Policy and Capital Flight in Kenya

Muchai¹,

Muchai²

2016

African Development Review

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“…Foreign direct investment refers to the investment made by a company in another country by either establishing a new business or purchasing another company (EweGhee, 2001). Additionally, the term "direct" is used to show the difference of foreign direct investment from the portfolio investment that means making investment in financial assets, such as government bonds (Ajayi, 2006).…”

Section: Introductionmentioning

confidence: 99%

Causality Relationship Between Foreign Direct Investments and Economic Improvement for Developing Economies

Adalı¹,

Yüksel²

2017

mjecon

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The aim of this study is to determine whether there is a causality relationship between foreign direct investments and economic growth for developing countries. Within this context, 30 developing countries, which have the highest GDP growth rate in 2016, are taken into the consideration. Furthermore, annual data of these countries for the periods between 1991 and 2015 is evaluated with the help of Dumitrescu Hurlin panel causality analysis. It is concluded that there is a causality relationship from foreign direct investments to economic growth. In other words, it is identified that foreign direct investment is an important cause of economic growth. Hence, it can be said that developing countries should focus on the ways to attract foreign direct investments to their companies in order to have economic growth. In addition to this situation, it is also identified that there is a causality relationship from economic growth to FDI. This situation shows that when the economies of the countries are improved, it attracts foreign investors to make a direct investment in those countries. Keywords

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“…Moreover, inadequate public capital is a defining feature of poor countries, and this shortage impairs wellbeing and curtails private investment in a setting in which the governments of poor countries are insufficiently creditworthy to finance the investment needed to redress these situations (Bhattacharyya and Collier 2014). IFFs also increase risk and uncertainty, resulting in a movement of scarce resources away from domestic investment and productive activities (Lessard and Williamson 1987;Ndikumana and Boyce 2011;Nkurunziza 2012;Ajayi 2015). In this sense, the UN Conference on Trade and Development "stresses the importance of stemming capital flight to release more resources for investment" (UNCTAD 2014, p. 1).…”

Section: Iffs and Human Developmentmentioning

confidence: 99%

Illicit Financial Flows: Another Road Block to Human Development in Low- and Middle-Income Countries

2018

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This article analysed the relationship between illicit financial flows (IFFs) and human development, as measured with the United Nations Human Development Index (HDI), using data for 56 low-and middle-income countries for the period 2002-2013. The main result was that, in the cluster of the most corrupt countries, the total effect of an annual 10% point increase in the ratio of IFFs to total trade would imply a 21.7 points decrease in the HDI level as a long-run effect. Although apparently small, this estimated long-run effect is three times greater than the annual average increase observed in the HDI over the period for the entire sample of countries.

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Capital Flight and Economic Development in Africa

Cited by 10 publications

References 16 publications

Fiscal Policy and Capital Flight in Kenya

Fiscal Policy and Capital Flight in Kenya

Causality Relationship Between Foreign Direct Investments and Economic Improvement for Developing Economies

Illicit Financial Flows: Another Road Block to Human Development in Low- and Middle-Income Countries

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