Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach

Samson Bredino; Peter Fiderikumo; Adedoyin Adesuji

doi:doi:10.11648/j.jbed.20180301.14

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Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach

Samson Bredino, Peter Fiderikumo, Adedoyin Adesuji

Published in Journal of Business and Economic Development (Volume 3, Issue 1)

Received: 22 December 2017 Accepted: 15 January 2018 Published: 21 March 2018

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Abstract

This article examined the impact of capital flight on economic growth in Nigeria. Classical methods of predicting impact of capital flight on economic growth have not yielded much result. This research examines time series data which includes gross domestic product (GDP), capital flight, exchange rate and external debt which was computed from the national Bureau of Statistics and central Bank of Nigeria Statistical Bulletin. The model estimated to cover the period 1980 – 2012 was analyzed using combined global technique, Artificial Neural Network (ANN) as a predictive technique and classical techniques like Ordinary Least Square (OLS) and co-integration/error correction methods. The variable in the model was estimated for possible co-integration. Research finding showed that capital flight have adverse impact on the GDP, while exchange rate impacts positively on the GDP which is in consonance with apriori expectation. Based on the findings, recommendations were made on how to check the menace of capital flight in Nigeria. Among such recommendation is the need for the government to setup appropriate institutions to check the volume of capital that is been flown out of the country, there should be restrictions on external borrowing tendencies on all levels of governments and agencies as well as private sector organizations; government should maintain a competitive and stable exchange rate policy.

Published in	Journal of Business and Economic Development (Volume 3, Issue 1)
DOI	10.11648/j.jbed.20180301.14
Page(s)	22-29
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Gross Domestic Product, Capital Flight, External Debt, Exchange Rate

References

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[4]	Boyce, J. K., & Ndukumana, L. (2001). Is Africa a Net Creditor? New Estimates of Capital Flight from Severely Indebted Sub-Saharan African Countries. Journal of Development Studies, 38 (2) 27-56.
[5]	World Bank (1995).
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[8]	Cline, William R., “Discussion” (of Chapter 3), in Donald R. Lessard and John Williamson, eds., Capital Flight and Third World Debt, Washington, D. C., Institute for International Economics, 1987.
[9]	Boyce, J. K., & Ndukumana, L. (2001). Is Africa a Net Creditor? New Estimates of Capital Flight from Severely Indebted Sub-Saharan African Countries. Journal of Development Studies, 38 (2) 27-56.
[10]	Collier, P., Hoefler. A & Patillo C. (2001). Flight Capital as a Portfolio Choice, World Bank Economic Review. Vol 15/1.
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[21]	Jingan, M. L (1997). Applied Econometrics. Benin City. Mindex Publishing.
[22]	[24). Valeriia, G. (2009). The Impact of Capital Flight on Economic Growth. Russia; Kyive School of Economics.
[23]	Bakare, A. S. (2011). The Determinants and Roles of Capital Flight in the Growth of Process of Nigerian Economy: Vector Autoregressive Model Approach. British Journal of Management and Economics, 1 (2), 100-133.
[24]	Otene, S. and Richard, E. (2012. Capital Flight and Nigeria, s Economy. Journal of Research In National Development. 10 (2).
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APA Style

Samson Bredino, Peter Fiderikumo, Adedoyin Adesuji. (2018). Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach. Journal of Business and Economic Development, 3(1), 22-29. https://doi.org/10.11648/j.jbed.20180301.14

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ACS Style

Samson Bredino; Peter Fiderikumo; Adedoyin Adesuji. Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach. J. Bus. Econ. Dev. 2018, 3(1), 22-29. doi: 10.11648/j.jbed.20180301.14

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AMA Style

Samson Bredino, Peter Fiderikumo, Adedoyin Adesuji. Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach. J Bus Econ Dev. 2018;3(1):22-29. doi: 10.11648/j.jbed.20180301.14

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@article{10.11648/j.jbed.20180301.14,
  author = {Samson Bredino and Peter Fiderikumo and Adedoyin Adesuji},
  title = {Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach},
  journal = {Journal of Business and Economic Development},
  volume = {3},
  number = {1},
  pages = {22-29},
  doi = {10.11648/j.jbed.20180301.14},
  url = {https://doi.org/10.11648/j.jbed.20180301.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20180301.14},
  abstract = {This article examined the impact of capital flight on economic growth in Nigeria. Classical methods of predicting impact of capital flight on economic growth have not yielded much result. This research examines time series data which includes gross domestic product (GDP), capital flight, exchange rate and external debt which was computed from the national Bureau of Statistics and central Bank of Nigeria Statistical Bulletin. The model estimated to cover the period 1980 – 2012 was analyzed using combined global technique, Artificial Neural Network (ANN) as a predictive technique and classical techniques like Ordinary Least Square (OLS) and co-integration/error correction methods. The variable in the model was estimated for possible co-integration. Research finding showed that capital flight have adverse impact on the GDP, while exchange rate impacts positively on the GDP which is in consonance with apriori expectation. Based on the findings, recommendations were made on how to check the menace of capital flight in Nigeria. Among such recommendation is the need for the government to setup appropriate institutions to check the volume of capital that is been flown out of the country, there should be restrictions on external borrowing tendencies on all levels of governments and agencies as well as private sector organizations; government should maintain a competitive and stable exchange rate policy.},
 year = {2018}
}

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TY  - JOUR
T1  - Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach
AU  - Samson Bredino
AU  - Peter Fiderikumo
AU  - Adedoyin Adesuji
Y1  - 2018/03/21
PY  - 2018
N1  - https://doi.org/10.11648/j.jbed.20180301.14
DO  - 10.11648/j.jbed.20180301.14
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 22
EP  - 29
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20180301.14
AB  - This article examined the impact of capital flight on economic growth in Nigeria. Classical methods of predicting impact of capital flight on economic growth have not yielded much result. This research examines time series data which includes gross domestic product (GDP), capital flight, exchange rate and external debt which was computed from the national Bureau of Statistics and central Bank of Nigeria Statistical Bulletin. The model estimated to cover the period 1980 – 2012 was analyzed using combined global technique, Artificial Neural Network (ANN) as a predictive technique and classical techniques like Ordinary Least Square (OLS) and co-integration/error correction methods. The variable in the model was estimated for possible co-integration. Research finding showed that capital flight have adverse impact on the GDP, while exchange rate impacts positively on the GDP which is in consonance with apriori expectation. Based on the findings, recommendations were made on how to check the menace of capital flight in Nigeria. Among such recommendation is the need for the government to setup appropriate institutions to check the volume of capital that is been flown out of the country, there should be restrictions on external borrowing tendencies on all levels of governments and agencies as well as private sector organizations; government should maintain a competitive and stable exchange rate policy.
VL  - 3
IS  - 1
ER  -

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Author Information

Samson Bredino

Economics Department, University of Port Harcourt, Rivers State, Nigeria
Peter Fiderikumo

Department of Banking and Finance, Bayelsa State College of Arts and Science, Bayelsa State, Nigeria
Adedoyin Adesuji

Petroleum and Gas Engineering Department, University of Port-Harcourt, Rivers State, Nigeria

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Plain Text BibTeX RIS

APA Style

Samson Bredino, Peter Fiderikumo, Adedoyin Adesuji. (2018). Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach. Journal of Business and Economic Development, 3(1), 22-29. https://doi.org/10.11648/j.jbed.20180301.14

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ACS Style

Samson Bredino; Peter Fiderikumo; Adedoyin Adesuji. Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach. J. Bus. Econ. Dev. 2018, 3(1), 22-29. doi: 10.11648/j.jbed.20180301.14

Copy | Download

AMA Style

Samson Bredino, Peter Fiderikumo, Adedoyin Adesuji. Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach. J Bus Econ Dev. 2018;3(1):22-29. doi: 10.11648/j.jbed.20180301.14

Copy | Download

@article{10.11648/j.jbed.20180301.14,
  author = {Samson Bredino and Peter Fiderikumo and Adedoyin Adesuji},
  title = {Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach},
  journal = {Journal of Business and Economic Development},
  volume = {3},
  number = {1},
  pages = {22-29},
  doi = {10.11648/j.jbed.20180301.14},
  url = {https://doi.org/10.11648/j.jbed.20180301.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20180301.14},
  abstract = {This article examined the impact of capital flight on economic growth in Nigeria. Classical methods of predicting impact of capital flight on economic growth have not yielded much result. This research examines time series data which includes gross domestic product (GDP), capital flight, exchange rate and external debt which was computed from the national Bureau of Statistics and central Bank of Nigeria Statistical Bulletin. The model estimated to cover the period 1980 – 2012 was analyzed using combined global technique, Artificial Neural Network (ANN) as a predictive technique and classical techniques like Ordinary Least Square (OLS) and co-integration/error correction methods. The variable in the model was estimated for possible co-integration. Research finding showed that capital flight have adverse impact on the GDP, while exchange rate impacts positively on the GDP which is in consonance with apriori expectation. Based on the findings, recommendations were made on how to check the menace of capital flight in Nigeria. Among such recommendation is the need for the government to setup appropriate institutions to check the volume of capital that is been flown out of the country, there should be restrictions on external borrowing tendencies on all levels of governments and agencies as well as private sector organizations; government should maintain a competitive and stable exchange rate policy.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach
AU  - Samson Bredino
AU  - Peter Fiderikumo
AU  - Adedoyin Adesuji
Y1  - 2018/03/21
PY  - 2018
N1  - https://doi.org/10.11648/j.jbed.20180301.14
DO  - 10.11648/j.jbed.20180301.14
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 22
EP  - 29
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20180301.14
AB  - This article examined the impact of capital flight on economic growth in Nigeria. Classical methods of predicting impact of capital flight on economic growth have not yielded much result. This research examines time series data which includes gross domestic product (GDP), capital flight, exchange rate and external debt which was computed from the national Bureau of Statistics and central Bank of Nigeria Statistical Bulletin. The model estimated to cover the period 1980 – 2012 was analyzed using combined global technique, Artificial Neural Network (ANN) as a predictive technique and classical techniques like Ordinary Least Square (OLS) and co-integration/error correction methods. The variable in the model was estimated for possible co-integration. Research finding showed that capital flight have adverse impact on the GDP, while exchange rate impacts positively on the GDP which is in consonance with apriori expectation. Based on the findings, recommendations were made on how to check the menace of capital flight in Nigeria. Among such recommendation is the need for the government to setup appropriate institutions to check the volume of capital that is been flown out of the country, there should be restrictions on external borrowing tendencies on all levels of governments and agencies as well as private sector organizations; government should maintain a competitive and stable exchange rate policy.
VL  - 3
IS  - 1
ER  -

Copy | Download