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Capital flight and extent of corruption control in the least corrupt African countries: An empirical assessment

Thales Pacific Yapatake Kossele (Institute of Governance, Humanities and Social Sciences, Pan-African University, Yaoundé, Cameroon and Centre de Recherche pour le Développement Economique, Bangui, Central African Republic)
Magalie Gabriella Ngaba Mbai-Akem (Department of Economics and Management, University of Yaoundé II, Cameroon and Centre de Recherche pour le Développement Economique, Bangui, Central African Republic)

Indian Growth and Development Review

ISSN: 1753-8254

Article publication date: 9 August 2019

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

Acknowledgements

The authors would like to thank the editor and two anonymous referees for their constructive suggestions that led to the improvement of this paper. Thank you also to Kabanda Umar, Sarah Bernard Nsaidzedze from as well as Sonia Manuella Mbaiokoum Khothoh from American University for the proofreading and suggestions. This work was supported by the African Union Scholarship of Pan-African University (PAU).

Citation

Yapatake Kossele, T.P. and Ngaba Mbai-Akem, M.G. (2019), "Capital flight and extent of corruption control in the least corrupt African countries: An empirical assessment", Indian Growth and Development Review, Vol. 13 No. 3, pp. 469-483. https://doi.org/10.1108/IGDR-10-2018-0109

Publisher

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Emerald Publishing Limited

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