Impacts Of Capital Flight On Economic Growth In Nigeria
DOI:
https://doi.org/10.31686/ijier.vol3.iss8.407
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Keywords:
Capital Flight, Gross Domestic Product, Economic Growth, Developing Countries, Foreign Direct InvestmentAbstract
This study examines the impacts of capital flight on economic growth in Nigeria between 1980 and 2012. The study used co-integration, Ordinary Least Square (OLS) and Error Correction Mechanism (ECM) as its main estimation techniques. The evidence, however, shows that capital flight, foreign reserve, external debt, foreign direct investment and current account balance co-integrate with Gross Domestic Product (GDP) in Nigeria within the year under study. It was also discovered that capital flight had negative impact on the economy. Based on the empirical findings, it is recommended that the government should create an enabling environment for profitable investment and offer foreign investors attractive incentives as this will reduce the occurrence of capital flight from Nigeria and lead to sustainable growth and development.
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