 THE CAPITAL FLIGHT FROM INDIA: A CASE OF MISSING WOODS FOR TREES?Ashis Pradhan and Gourishankar Hiremath The Singapore Economic Review (SER), 2020, vol. 65, issue 02, 365-383 Abstract: The surge of capital inflow into emerging markets since the 1990s has attracted much research, but capital flight from these economies has received scant attention in research and policy debates, despite its severe implications. The present study attempts to address the issue of capital flight and gap in the literature. Our estimates show a steep increase in the magnitude of capital flight from India since 2003, and empirical results suggest that the significant determinants of capital flight are GDP and exchange rate. We find that higher interest rates discourage capital flight; while keeping interest rates high may partially restrict capital flight, it is infeasible, and may impede future economic growth. Our findings suggest the need for interventions and changes in the current policy framework to improve investment opportunities for residents and arrest capital flight. Keywords: Capital flight; unrecorded capital flows; residual method; ARDL; emerging markets; India; financial liberalization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:65:y:2020:i:02:n:s0217590816500429 Ordering information: This journal article can be ordered from DOI: 10.1142/S0217590816500429 Access Statistics for this article The Singapore Economic Review (SER) is currently edited by Euston Quah More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd. |
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