Evaluating the heterogeneous role of institutional quality in mitigating the adverse effects of capital flight on Nigeria’s economic growth: Fresh insights from a quantile nonlinear ARDL framework
This study seeks to examine whether institutional quality mitigated the adverse effect of capital flight on economic growth in Nigeria between 1996 and 2022. The study utilised the novel quantile-based nonlinear autoregressive distributed lag(QNARDL) estimation procedure to estimate the...
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| Main Authors: | , , , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, Belgrade
2025-01-01
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| Series: | Ekonomski Anali |
| Subjects: | |
| Online Access: | https://doiserbia.nb.rs/img/doi/0013-3264/2025/0013-32642544143O.pdf |
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| Summary: | This study seeks to examine whether institutional quality mitigated the
adverse effect of capital flight on economic growth in Nigeria between 1996
and 2022. The study utilised the novel quantile-based nonlinear
autoregressive distributed lag(QNARDL) estimation procedure to estimate the
size-based and sign-based heterogeneous link between the investigated
series. The following outcomes were obtained: First, capital flight
substantially reduces economic growth at diverse quantiles. Second,
institutional quality significantly affects economic growth positively.
Third, the effects of capital flight and institutional quality on growth are
sign- and size-dependent, upholding their heterogeneous link. Fourth, while
capital flight is detrimental to economic growth, institutional quality
mitigates the devastating effect of capital flight on economic growth at
diverse quantiles, both in the short run and long run. The study therefore
recommends a business-friendly environment and investment- oriented policy
to spur investors to massively invest in the country rather than
transferring capital to other countries. Furthermore, quality institutions
through good governance, political stability, a strong regulatory system,
transparency, fighting corruption, and adherence to rules are required to
reduce capital flight and thus enhance economic growth. |
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| ISSN: | 0013-3264 1820-7375 |