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British Journal of Economics, Management & Trade, ISSN: 2278-098X,Vol.: 10, Issue.: 3


The Impact of Capital Flight on Economic Development: Nigeria in Focus


Paul C. Obidike1, Kalu Ebi Uma2*, Joseph Chukwudi Odionye3 and Hycenth O. R. Ogwuru4

1Department of Accountancy, Management and Entrepreneurial Studies, Federal University Ndufu Alike Ikwo, P.M.B 1010, Abakaliki, Ebonyi State, Nigeria.

2Department of Economics and Development Studies, Federal University, Ndufu Alike-Ikwo, P.M.B 1010, Abakaliki, Ebonyi State, Nigeria.

3Department of Economics, Rhema University, Aba, Abia State, Nigeria.

4Abia State University, Uturu, P.M.B 2000, Uturu, Nigeria.

Article Information
(1) Chiang-Ming Chen, Department of Economics, National Chi Nan University, Taiwan.
(1) Anonymous, University of Fort Hare, South Africa.
(2) Anonymous, University of Macedonia, Greece.
Complete Peer review History: http://sciencedomain.org/review-history/11649


The study investigated the impact of capital flight on the economic development of Nigeria. Following the behavioural pattern of the variables on the basis of time series property test involving Augmented Dickey-Fuller (ADF), we adopted Autoregressive Distributed Lagged model (ARDL) due to Pesaran and Shin [44] in the study. The result of the Auto Regressive Distributed Lagged (ARDL) model showed that capital flight has negative and significant impact on economic development. The CUSUM and CUSUMSQ tests showed evidence of long run stability of the parameters of the model. We, therefore, made the following recommendations, among others: Government should take concerted steps to improve security of life and property in the country because security lapse is a threat to investment as well as business; the public resource managers should sincerely partner with anti-graft agencies to ensure that all the channels through which public office holders launder money abroad are stopped; besides, the international anti-corruption law should be implemented to reduce the quantum of launder money and efficient public finance management discipline should be adhered strictly.

Keywords :

Capital flight; economic development; impact; autoregressive distributed lagged model.

Full Article - PDF    Page 1-13

DOI : 10.9734/BJEMT/2015/20122

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