EconPapers    
Economics at your fingertips  
 

Impact of Capital Flight on Exchange rate in Nigeria

Johnny Nelson (), Okoyan Krokeme, Dumani Markjarkson and Ekokeme Tamaroukro Timipere

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2018, vol. 8, issue 1, 41-50

Abstract: The study examined capital flight and real exchange rate in Nigeria from 1990 to 2014. The study used five independent variables (capital flight, foreign direct investment, current account balance, foreign borrowing and external reserves) and one dependent variable (real exchange rate). Test carried out include unit root test, co-integration test, causality test and ordinary least square. The study revealed that: There is positive significant relationship between foreign borrowing and real exchange rate in Nigeria, there is negative and insignificant relationship between capital flight and real exchange rate in Nigeria, there is positive and insignificant relationship between foreign direct investment and real exchange rate in Nigeria, there is negative insignificant relationship between current account balance and real exchange rate in Nigeria, and there is positive insignificant relationship between foreign reserves and real exchange rate in Nigeria. Based on the findings, the study recommends that, real exchange rate depreciation and appreciation can cause an increase in capital flight, there is a serious need by the fiscal authorities to pursue policy that creates less exchange rate uncertainties and should also ensure that real exchange rate movements are stable and this can also be complemented by closely observing the general rise in the price level.

Keywords: Real Exchange Rate; Capital Flight; Foreign Direct Investment; Current Account Balance; Foreign Borrowing and External Reserves (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://hrmars.com/hrmars_papers/Impact_of_Capital_ ... rate_in_Nigeria1.pdf (application/pdf)
http://hrmars.com/hrmars_papers/Impact_of_Capital_ ... rate_in_Nigeria1.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:8:y:2018:i:1:p:41-50

Access Statistics for this article

More articles in International Journal of Academic Research in Accounting, Finance and Management Sciences from Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences
Bibliographic data for series maintained by Hassan Danial Aslam ().

 
Page updated 2019-06-22
Handle: RePEc:hur:ijaraf:v:8:y:2018:i:1:p:41-50