The Impact of Illicit Financial Flow on Economic Growth of Ethiopia

Alula Nerea ()

No 2018107, Working Papers from University of Ferrara, Department of Economics

Abstract: The objective of this study was to investigate the impact of Illicit Financial Flow (IIF) on economic growth of Ethiopia. The study used secondary data, particularly from 2000 to 2015 years. It has also employed varies internationally recognized estimation models (Hot Money Narrow and Trade miss-invoicing) to get the magnitude of Illicit Financial Flow in Ethiopia. Moreover, it employed error correction model to get a short and long run velocity and magnitudinal effect of IFF on Gross Domestic Product (GDP). The study found that IFF has significant and negative impact on GDP. Based on research findings, establishing controlling and auditing mechanisms for trans-boundary trade activities in Ethiopia, creating effective institution and building collaborative approach are recommended to curb the magnitude of IFF and its impact on economic growth.

Keywords: IFF; HMN; ECM; Trade Miss-invoicing (search for similar items in EconPapers)
JEL-codes: C22 C53 F32 O47 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2018-12-20
New Economics Papers: this item is included in nep-acc and nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:udf:wpaper:2018107

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