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Analyzing Effective Factors of Capital Outflow from the Middle East and North African Countries (MENA)

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  • Heydari, Hassan
  • Jariani, Farzaneh

Abstract

Our objective in this study is to analyze effective factors of capital outflow from the Middle East and North African countries. Despite a high rate of unemployment, budget deficits, low per capita income, foreign debts and high inequality, the MENA countries are now facing with capital outflow problem and therefore to work out a solution for this problem we should recognize the factors which affect it. In this research, we have postulated the variables showing economic conditions including Gross Domestic Product (GDP) Growth, Inflation and Foreign Exchange Rate Fluctuations, institutions quality variables including economic freedom index, governance and ruling index (The Right to Comment and Responsibility, Political Stability, Government Efficiency and Effectiveness, Rules and Regulations Quality), oil rents, political risks, (Arab Spring and the Global Financial Crisis) as important factors affecting capital outflow from the Middle East and North African countries. The model has been estimated using the GMM method from 2000 to 2018. The results show that improvement of an economic condition such as an increase in economic growth and an increase in the transparency of the governments can be known as good options for reducing the capital outflow from MENA countries.

Suggested Citation

  • Heydari, Hassan & Jariani, Farzaneh, 2020. "Analyzing Effective Factors of Capital Outflow from the Middle East and North African Countries (MENA)," MPRA Paper 104547, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:104547
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    2. Sini, Snow & Abdul-Rahim, A.S. & Chin, Lee & Said, Rusmawati & Sulaiman, Chindo, 2022. "Natural resources’ impact on capital flow and conflict relationship in Africa: A novel insight from GMM and quantile regression," Resources Policy, Elsevier, vol. 78(C).

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    More about this item

    Keywords

    Capital Flight; Capital Outflow; MENA countries; Middle East Countries; GMM;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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