Financial liberalisation and illicit financial outflows in African countries: does institutional quality and macroeconomic stability matter?

IF 2 Q2 BUSINESS, FINANCE

Journal of Financial Regulation and Compliance Pub Date : 2024-08-22 DOI:10.1108/jfrc-06-2023-0078

Leward Jeke, Clement Zibusiso Moyo, Richard Apau

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引用次数: 0

Abstract

Purpose

Although the consequences of illicit financial outflows on the economies of the world continue to exert adverse impacts on many economies of the world, explanations regarding specific drivers of the illicit outflows remain divergent in the literature. This study aims to investigate the effect of financial liberalisation on illicit financial outflows in Africa. Furthermore, the study also examines the effect of macroeconomic stability and institutional quality on illicit outflows.

Design/methodology/approach

To achieve the objectives, the study uses a dynamic panel system generalised method of moments technique to analyse annual data from the period 1995 to 2015 of 22 African countries.

Findings

The results show that financial liberalisation helps to reduce illicit capital outflows. Furthermore, improved institutional quality is associated with lower levels of capital outflows, thus affirming the theoretical expectations that stable political environment boost investor confidence. Overall, the study show that financial liberalisation reduces illicit outflows. However, liberalisation without sound macroeconomic stability and institutional quality may avail opportunities for illicit outflows.

Research limitations/implications

The main limitation of the study was lack of data that spans periods beyond 2015 for most of the variables on financial illicit flows. The available data sources could not test the objectives beyond 2015.

Originality/value

Current literature on the relationship between financial liberalisation and illicit fund outflows are generally conducted in the context implications on economic growth. However, beyond economic growth, financial liberalisation may impact on illicit financial outflows. Furthermore, other institutional and macroeconomic dynamics may influence illicit financial outflow, especially for developing economies in Africa.

查看原文本刊更多论文

非洲国家的金融自由化和非法资金外流：机构质量和宏观经济稳定性是否重要？

目的虽然非法资金外流对世界经济造成的后果继续对世界许多经济体产生不利影响，但有关非法资金外流具体驱动因素的解释在文献中仍存在分歧。本研究旨在探讨金融自由化对非洲非法资金外流的影响。此外，本研究还探讨了宏观经济稳定性和机构质量对非法资金外流的影响。为实现上述目标，本研究采用动态面板系统广义矩法技术，对 22 个非洲国家 1995 年至 2015 年的年度数据进行了分析。此外，制度质量的提高与资本外流水平的降低相关联，从而证实了稳定的政治环境会增强投资者信心的理论预期。总体而言，研究表明金融自由化减少了非法资本外流。研究的局限性/影响本研究的主要局限性在于缺乏有关非法资金流动的大多数变量的 2015 年以后的数据。现有数据来源无法检验 2015 年以后的目标。原创性/价值目前有关金融自由化与非法资金外流之间关系的文献通常是在经济增长影响的背景下进行研究的。然而，除了经济增长之外，金融自由化也可能对非法资金外流产生影响。此外，其他制度和宏观经济动态也可能影响非法资金外流，尤其是对非洲的发展中经济体而言。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Financial Regulation and Compliance BUSINESS, FINANCE-

CiteScore

2.60

自引率

11.10%

发文量

期刊介绍： Since its inception in 1992, the Journal of Financial Regulation and Compliance has provided an authoritative and scholarly platform for international research in financial regulation and compliance. The journal is at the intersection between academic research and the practice of financial regulation, with distinguished past authors including senior regulators, central bankers and even a Prime Minister. Financial crises, predatory practices, internationalization and integration, the increased use of technology and financial innovation are just some of the changes and issues that contemporary financial regulators are grappling with. These challenges and changes hold profound implications for regulation and compliance, ranging from macro-prudential to consumer protection policies. The journal seeks to illuminate these issues, is pluralistic in approach and invites scholarly papers using any appropriate methodology. Accordingly, the journal welcomes submissions from finance, law, economics and interdisciplinary perspectives. A broad spectrum of research styles, sources of information and topics (e.g. banking laws and regulations, stock market and cross border regulation, risk assessment and management, training and competence, competition law, case law, compliance and regulatory updates and guidelines) are appropriate. All submissions are double-blind refereed and judged on academic rigour, originality, quality of exposition and relevance to policy and practice. Once accepted, individual articles are typeset, proofed and published online as the Version of Record within an average of 32 days, so that articles can be downloaded and cited earlier.