One Bad Turn Deserves Another: How Terrorism Sustains the Addiction to Capital Flight in Africa
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 following 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.
KeywordsCapital flight terrorism Africa
JEL ClassificationC50 D74 F23 N40 O55
The authors are indebted to the editor and reviewers for the constructive comments
Compliance with Ethical Standards
Conflict of Interest
The authors declare that they have no conflict of interest.
This article does not contain any studies with human participants or animals performed by the authors.
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