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

Thales Pacific Yapatake Kossele () and Magalie Gabriella Ngaba Mbai-Akem

Indian Growth and Development Review, 2019, vol. 13, issue 3, 469-483

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.

Keywords: Panel data; Capital flight; Extent of corruption control; The least corrupt African countries; C50; C33; F21; O38; O55 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:igdrpp:igdr-10-2018-0109

DOI: 10.1108/IGDR-10-2018-0109

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