Capital flight, institutional quality and real sector in sub-Saharan African countries
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Publisher
Emerald Publishing Limited
Abstract
Description
Purpose
This study aims to provide an empirical investigation into rising capital flight and the role of
institutional quality to mitigate its effect on the real sector in sub-Saharan Africa (SSA).
Design/methodology/approach
The study uses the system generalized method of moments and uses data spanning from 1989 to
2020 from 26 SSA countries.
Findings
The findings show that capital flight has no direct impact on the real sector while institutional
quality adversely impacted the agricultural and industrial sectors. The study also found that
institutional quality is unable to mitigate the effect of capital flight on the industrial sector.
Originality/value
This study investigates if institutional quality mitigates the impact of capital flight on the real
sector proxied by industrial value-added and agriculture value-added.
Keywords
HB Economic Theory