Does financial liberalization decrease capital flight? A panel causality analysis

YALTA A. Y., Yalta A. T.

INTERNATIONAL REVIEW OF ECONOMICS & FINANCE, cilt.22, sa.1, ss.92-100, 2012 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 22 Sayı: 1
  • Basım Tarihi: 2012
  • Doi Numarası: 10.1016/j.iref.2011.09.003
  • Dergi Adı: INTERNATIONAL REVIEW OF ECONOMICS & FINANCE
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.92-100
  • Anahtar Kelimeler: Capital flight, Financial liberalization, Emerging markets, Panel causality, ECONOMIC-GROWTH, FLOW, INVESTMENT, COUNTRIES, MARKET, TESTS, RICH
  • Hacettepe Üniversitesi Adresli: Evet

Özet

We employ a panel causality approach in order to examine whether financial liberalization affects the magnitude of capital flight, which measures unrecorded accumulation of foreign assets by the private sector. Our data from 21 emerging market economies for the period between 1980 and 2004 show no significant evidence of a causal relationship. Lagged values of capital flight, however, seem to increase its current level, indicating its self-reinforcing characteristic. Our results suggest that financial liberalization policies per se may not be helpful in reducing capital flight. (C) 2011 Elsevier Inc. All rights reserved.