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Kidnapping rate and capital flight: Empirical evidence from developing countries

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  • Godwin Okafor
  • Obiajulu Ede

Abstract

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.

Suggested Citation

  • Godwin Okafor & Obiajulu Ede, 2023. "Kidnapping rate and capital flight: Empirical evidence from developing countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2590-2606, July.
    • Handle: RePEc:wly:ijfiec:v:28:y:2023:i:3:p:2590-2606
    DOI: 10.1002/ijfe.2551
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