One Bad Turn Deserves Another: How Terrorism Sustains the Addiction to Capital Flight in Africa

Journal of Industry, Competition and Trade, 19(3), pp. 501–535 (September, 2019).

36 Pages Posted: 6 May 2019 Last revised: 21 Aug 2019

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Rexon Tayong Nting

Bangor University - University of Wales Trinity Saint David (UWTSD)

Evans Stephen Osabuohien

Covenant University; Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE)

Date Written: January 4, 2019

Abstract

This inquiry assesses if terrorism sustains the capital flight trap and whether the relationship is affected by varying the levels of governance and globalisation. The empirical evidence is based on interactive Generalised Method of Moments with data from 37 African countries for the period 1996-2010. The followings are established. (1) Evidence of a capital flight trap is apparent because past values of capital flight have a positive effect on future values of capital flight. (2) Terrorism sustains the positive effect of the capital flight trap on capital flight. (3) For the most part (especially with regard to political governance), terrorism sustains the addiction to capital flight in above-median governance sub-samples. Policy implications are discussed.

Keywords: Capital flight, terrorism, Africa

JEL Classification: C50; D74; F23; N40; O55

Suggested Citation

Asongu, Simplice and Nting, Rexon Tayong and Osabuohien, Evans Stephen, One Bad Turn Deserves Another: How Terrorism Sustains the Addiction to Capital Flight in Africa (January 4, 2019). Journal of Industry, Competition and Trade, 19(3), pp. 501–535 (September, 2019). , Available at SSRN: https://ssrn.com/abstract=3365682 or http://dx.doi.org/10.2139/ssrn.3365682

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Rexon Tayong Nting

Bangor University - University of Wales Trinity Saint David (UWTSD) ( email )

United Kingdom

Evans Stephen Osabuohien

Covenant University ( email )

P.M.B. 1023
Km 10 Idiroko road
Ota, Ogun State 234
Nigeria
+2348028858727 (Phone)

HOME PAGE: http://www.covenantuniversity.edu.ng

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE) ( email )

Tulpenfeld 4
Bonn, 53113
Germany
+4922894927290 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
8
Abstract Views
177
PlumX Metrics