An empirical investigation of capital flight and economic growth nexus in Africa

Samuel Antwi, Anthony Buawolor Tetteh, Patience Armah, Abdul-Muheen Mukhtar and Lois Amponsah Duedu

The Journal of International Trade & Economic Development, 2025, vol. 34, issue 6, 1420-1443

Abstract: This paper investigates the impact of capital flight on economic growth in Africa using 54 African countries from 2000 to 2021. The study employed the GMM and the dynamic panel threshold regression estimation techniques. GMM results revealed that capital flight negatively and significantly affects economic growth in Africa. The study also revealed that external debt repayment and outward foreign direct investment, proxies of capital flight, have a negative and significant effect on economic growth in Africa, except foreign portfolio investment outflow, which positively and insignificantly influences economic growth. Again, the dynamic panel threshold estimation results also revealed that capital flight negatively affects economic growth at all levels of capital flight in Africa. The study also revealed that all the proxies of capital flight, external debt repayments, foreign portfolio investment outflows, and outward foreign direct investment negatively and significantly affect economic growth above a certain threshold. However, external debt repayment has an insignificant negative effect on economic growth below the threshold in Africa. Based on the findings, African countries should implement stringent policies to curb capital flight and regulate external debt repayments and outward foreign direct investment to enhance economic growth.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2024.2389865 (text/html)
Access to full text is restricted to subscribers.

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:taf:jitecd:v:34:y:2025:i:6:p:1420-1443

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2024.2389865

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().