Volume 11 Issue 2 2015


Basheer Ahmed

Qaim Din Sahto
Iqra University Islamabad, Pakistan.

Abstract This study investigates the relationship between Capital Flight (CF) and its Determinants: Foreign Direct Investment (FDI), External Debt (ED), Exchange Rate (ER), Foreign Reserves (FR), Gross Domestic Product (GDP) growth, and Inflation (I). Methodology/Sample: CF from Pakistan is measured through the residual method which is the most used method in the literature. This method uses changes in ED, net FDI, Current Account Surplus (CAS), and changes in the FR to calculate the CF from 1971 to 2011. The results of the study show that there exists a relationship between CF and its determinants in the long run whereas no relationship is found in the short run.CF refers to the condition when money, investment, funds, and assets rapidly fly out of the country due to economic and political events that discourage and cause individual investors and companies to lose their confidence in the host country and its economic and political conditions.
Keywords CF; Gross Domestic Product; Inflation; Foreign Direct Investment; External Debt; Exchange Rate
Year 2015
Volume 11
Issue 2
Type Short Report
Recognized by Higher Education Commission of Pakistan, HEC
Category "Y"
Journal Name IBT Journal of Business Studies
Publisher Name ILMA University
Jel Classification -
ISSN no (E, Electronic) 2409-6520
ISSN no (P, Print) 2416-8393
Country Pakistan
City Karachi
Institution Type University
Journal Type Open Access
Manuscript Processing Blind Peer Reviewed
Format PDF
Paper Link
Page 55-64