ARTICLE
TITLE

Relationship Between Foreign Direct Investments and Capital Flight in Kenya: 1998-2018 10.33019/ijbe.v3i3.222

SUMMARY

The study established the relationship between Foreign Direct investments and Capital Flight in Kenya over the period 1998 to 2018. Quarterly time series data for calculation of capital flight and Gross Domestic Product growth rate, inflation and Foreign Direct investments were collected from the Central Bank of Kenya and Kenya National Bureau of Statistics. Two Autoregressive Distributed-lagged model models were fitted. Regression coefficients for FDI were 0.44 and -0.040 in the short run and -0.501 in the long run. The p values were 0.008 and 0.015 and 0.654 respectively. The results indicated that a 1 % increase in current quarters FDI would lead to a 0.44% increase in capital flight and a 1% increase in previous quarters FDI would lead to a decrease of 0.040% in capital flight. Regression results showed a coefficient of 0.006 and - 0.004 for Gross Domestic Product growth rate in the short run, and 0.038 in the long run. The p values were 0.422, and 0.638 and 0.749 respectively meaning that Gross Domestic Product growth rate and the capital flight had no significant relationship. Regression results showed a coefficient of -0.001 and -0.005 for inflation in the short run and -0.088 for inflation for the long run. The p values were 0.844 and 0.363 and 0.253 respectively. This indicated that inflation and the capital flight had an insignificant relationship. The study recommends that government adopts strategic management on FDI inflow transactions to avoid possible leakages of the same money going out as capital flight.

 Articles related

Tran Quang Huy,Hoang Minh,Tu Thao Huong Giang    

Competency framework has been studied widely for human resource development in organizations, but there are a few publications about researcher competency-based development in public research institutes. Therefore, the purpose of this paper is to investi... see more


Ilham Illahi, Harfandi Harfandi    

Tax evasion committed by taxpayers will reduce state revenues thereby hampering development activities. This tax evasion must be prevented so that the country's economy continues to grow and develop. This study examines the effect of gender on tax evasio... see more


Njabulo Ndaba,Johannes Sheefeni,Derek Yu    

AbstractOrientation: Financial inclusion (FI) and financial health (FH) are important for the country’s economic development, particularly upliftment of people from the lowerend of income distribution.Research purpose: The study investigated the relation... see more


Juniours Marire    

AbstractOrientation: Heterodox economic scholarship has challenged the neoclassical doctrine that fiscal deficit increases unemployment in the long-term.Research purpose: This article examined the relationship between fiscal deficits and unemployment.Mot... see more


Violeta Domanovic    

Research Question: This paper investigated whether a relationship exists between environmental, social and corporate governance (ESG) performance indicators and financial performance measures in the public sector. Motivation: Performance measurement play... see more

Revista: Management