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Capital flight and extent of corruption control in the least corrupt African countries

Author

Listed:
  • Thales Pacific Yapatake Kossele
  • Magalie Gabriella Ngaba Mbai-Akem

Abstract

Purpose - The purpose of this paper is to investigate the effect of corruption control on capital flight in the least corrupt African countries. Design/methodology/approach - Using panel data covering the period of 1996-2010. Findings - The results show that the extent of corruption, the total natural resources rent are statistically significant and affect positively the capital across the pooled, random and fixed effects. Inflation and economic growth are also found to have a negative impact on capital flight. Moreover, the exchange rate has a negative and significant effect on capital flight. Practical implications - The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. Social implications - The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This, in turn, will reduce the occurrence of capital flight and lead to the sustainable development. Originality/value - The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This, in turn, will reduce the occurrence of capital flight and lead to the sustainable development.

Suggested Citation

  • Thales Pacific Yapatake Kossele & Magalie Gabriella Ngaba Mbai-Akem, 2019. "Capital flight and extent of corruption control in the least corrupt African countries," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 13(3), pages 469-483, August.
    • Handle: RePEc:eme:igdrpp:igdr-10-2018-0109
    DOI: 10.1108/IGDR-10-2018-0109
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    Citations

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    Cited by:

    1. Thales Pacific Yapatake Kossele & Mom Aloysius Njong, 2020. "Capital flight and diamond exports in the Central African Republic: The role of political governance crisis," African Development Review, African Development Bank, vol. 32(3), pages 362-374, September.

    More about this item

    Keywords

    Panel data; Capital flight; Extent of corruption control; The least corrupt African countries; C50; C33; F21; O38; O55;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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