Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303725 
Year of Publication: 
2022
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 10 [Issue:] 1 [Article No.:] 2105975 [Year:] 2022 [Pages:] 1-26
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Capital flight is a major issue in developing economies; the problem is more severe in Africa, where domestic investment has been affected. Much attention has been given to the effect of legal and foreign capital flows in the international capital movement, disregarding illicit capital outflows (capital flight) from developing countries including Africa. This study examines the effects of capital flight and financial liberalization on domestic investment using the dynamic system generalized method of moments (GMM) for 30 African nations between 2000 and 2019. The econometric analysis revealed that capital flight is one of the conditions that severely constrains domestic investment financing in Africa. However, the impact of financial liberalization on domestic investment is shown to be insignificant. The empirical evidence is used to draw some policy implications aimed at reducing capital flight and enhancing domestic investment.
Subjects: 
capital flight
financial liberalization
domestic investment
system GMM
savings
JEL: 
E22
O16
P33
P45
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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