On Foreign Direct Investment from the ASEAN-8 Countries: A Panel Data Estimation

This paper examines how capital flight, loan interest rates, inflation, exchange rates and economic growth influence foreign direct investment in the ASEAN-8 countries. We apply fixed effect estimation to panel data for data belonging to eight countries from the period 1994 to 2018. The results show that capital flight and economic growth have a positive and significant effect on foreign direct investment. An increase in capital flight, capital retain from sources of funds which greater than the use of funds, has encouraged foreign direct investment to increase. Furthermore, increased economic growth has stimulated foreign direct investment. We find that an increase in loan interest rate (SIBOR), inflation and depreciation of the exchange rate triggers a significant decline in foreign direct investment. This finding implies that capital retention from capital flight and economic growth are the main factors that create an increase in foreign direct investment in the ASEAN-8 countries. Meanwhile, loan interest rates (SIBOR), inflation and depreciation of the exchange rate are the risk factors that investors need to consider when investing in those particular countries. This paper is useful for policy makers in the ASEAN-8 countries to consider these five variables, as the important factors that significantly influence foreign direct investment in the ASEAN-8 countries.

Hypotheses Testing: Capital Flight and Human Development Index in Nigeria

This study examined Capital Flight and human development index in Nigerian. Capital Flight was proxied by foreign direct investment abroad, external debt servicing, external reserves and capital and financial account deficits. Based on the study objectives, relevant literature were reviewed and evaluated. Relevant data were extracted from the annual Statistical Bulletin of the Central Bank of Nigeria and the National Bureau of Statistics. Unit root test was conducted using Augmented Dickey Fuller method which revealed that the variables were integrated at level and first difference: necessitating the use of autoregressive distributive lag/bonds test to explore the long run relationship existing among the variables in the model and the result showed that the variables in the model were co-integrated thus we proceeded in evaluating the long run as well as the co-integrating form in the model. From the result of the various tests, it was revealed that capital and financial account deficit, external debt servicing and external reserve were positively related to human development index while foreign direct investment outflows was negatively related to human development index. Also, capital and financial account deficit, external reserve and foreign direct investment outflow were significant while external debt servicing was not significant. Based on the findings from the analysis, the study recommended amongst others, that external debt acquired should be judiciously used for infrastructural development that would encourage investments which would ultimately bring about economic growth as well as enhance human development in Nigeria.

Capital Flight and Unemployment Rate in Nigeria

This study examined Capital Flight and unemployment rate in Nigeria. Capital flight was proxied by foreign direct investment abroad, external debt servicing, external reserves and capital and financial account deficits. Based on study objectives, relevant literatures were reviewed and evaluated. Relevant data were extracted from the annual Statistical Bulletin of the Central Bank of Nigeria and the National Bureau of Statistics. Unit root test was conducted using Augmented Dickey Fuller method which revealed that the variables were integrated at level and first difference necessitating the use of autoregressive distributive lag/bond test to explore the long run relationship existing among the variables in the model and the result showed that the variables in the model were co-integrated thus we proceeded in evaluating the long run as well as the co-integrating form in the model. From the result of the various tests, it was revealed capital flight did not actually increase unemployment rate in Nigeria within the periods studied by the researchers. Based on the findings from the analysis, the study recommended amongst others, that external debt acquired should be judiciously used for infrastructural development that would encourage investments which would ultimately bring about economic growth as well as enhance human development in Nigeria.

Copper will bolster economic improvements in Peru

Significance The booming copper industry will stimulate production overall while helping to bolster export earnings and treasury receipts. The Castillo administration has produced proposals for tax and other financial reforms which, if approved by Congress, will raise Peru’s low tax take and make the tax system somewhat more progressive. Impacts Peru will see inflation rise this year and next. Reserves will be sufficient to allay problems arising from capital flight. Treasury income from the proposed reforms will yield less than hoped for.

An Evaluative Study of Criminalistics: A Case of South African Counterfeiting and Knock-Off Menace

Counterfeit goods are a health hazard to human life, environment and business. More so as the goods destroy the viability of legitimate businesses across the world. Counterfeit goods are characterized as a threat to the financial viability of legitimate businesses and has a dire impact on the tax revenue of countries, necessitating its effective and efficient policing for the financial wellbeing of countries. If not well managed, counterfeit goods could lead to unemployment, disinvestment and capital flight in countries. The available evidence reveals that even though counterfeit goods has dire consequences for the economic wellbeing of countries, its penalties in most African countries are less severe in comparison to penalties for other crimes. The sight of counterfeit goods in many places, such as on busy street corners and transportation terminals in the Southern parts of Africa, attests to its prevalence in the continent. Especially in South Africa as the country has become a transit point for contrabands. Post 1994, South Africa opened its borders to the world of branded and protected goods and this enabled rogue people to trade in counterfeit goods. Effective policing is hindered by the use of sophisticated skills and expertise that leads to counterfeit goods resembling genuine goods. Moreover, in South Africa, the problem persists despite the promulgation of the Counterfeit Goods Act 37 of 1997, thus questioning the effectiveness of the policing strategies in use to quell the problem.

ANALISIS PENGARUH UTANG LUAR NEGERI DAN RISIKO NEGARA TERHADAP CAPITAL FLIGHT DI NEGARA BERKEMBANG ASEAN

This study aims to analyze the effect of foreign debt and country risk on capital flight in ASEAN developing countries. The country's risks include the current account/export ratio, economic growth, inflation, and political instability. Determination of the sample is based on annual time-series data for the period 2005 to 2019. The data used in this study is secondary data from the World Bank 2021 and the World Governance Indicator (WGI) 2021. This study uses panel data regression analysis with Fixed Effect Model using cross-section SUR (Seemingly Unrelated Regression). Based on the results of the F statistical test (simultaneous test) shows that foreign debt, current account/export ratio, economic growth, inflation, and political instability simultaneously have a significant effect on capital flight in ASEAN developing countries from 2005 to 2019. Then, based on the results t statistical test (partial test) shows that foreign debt, economic growth, inflation, and political instability have a significant positive effect on capital flight, while the current account/export ratio has a significant negative effect on capital flight in ASEAN developing countries from 2005 to 2019

China: capital flight or renminbi internationalization?

During 2014–2016, many analysts have claimed the occurrence of a capital flight in China due to the reduction of the country's foreign reserves by over US$800 billion. This paper aims therefore to answer the question: did China really undergo a capital flight in this period? Its methodology includes a detailed analysis of the Chinese external stocks and flows between 2014 and 2016, and an examination of the currency hierarchy and the international usage of the renminbi (RMB). The authors conclude: the fall in the foreign reserves that occurred in China in 2015–2016 was partially due to (i) a strategy of the Chinese government to diversify its international assets; and (ii) Chinese residents (private entities) increasing their foreign-asset holdings. Besides that, there did indeed occur a capital flight in China in 2015–2016, mostly due to a reduction of the non-resident deposits and loans, but these outflows were partially in RMB. Due to that core difference, the effects on the domestic economy are much lower. Furthermore, the RMB outflows may contribute to the internationalization of the RMB.

Doing Business and capital flight: role of financial development

Purpose The purpose of this paper is to investigate the effect of financial development on the Doing Business and capital flight contagion. And further, this study determines the threshold beyond which financial development reduces capital flight. Design/methodology/approach A two-step system generalized methods of moment empirical model with linear interaction between Doing Business and financial development was estimated. This study used data on 26 countries over 12 years (2004–2015). Findings The main results indicated that, although Doing Business had a significant positive effect on capital flight, the interactive term had a significant adverse effect on capital flight. This outcome suggests that to reduce capital flight, a well-reformed and efficient business environment should be embedded with an efficient, stable and well-developed financial sector. In addition, the authors found only South Africa has a robust financial framework beyond the threshold of 0.383, whereas Congo, Rep., Rwanda, Malawi, Sierra Leone and Congo, Dem. Rep. had the weakest financial system and sector in Sub-Saharan Africa. Research limitations/implications This study recommends that policymakers should initiate policies that would enhance financial development. Originality/value This study’s main contributions are that the authors estimated the threshold beyond which financial development helps the business environment reduce the rate of capital flight. Further, the authors have shown that financial development is a catalyst to propel the deterioration powers of the business environment against capital flight. Also, the authors have estimated the long-run effect of the variables of interest on capital flight.