Capital Flight in Asia:A Panel Analysis

This article is an attempt to study the magnitude and the determinants of capital flight from East,South and Southeast Asian nations within the period of 1984-2004.A refined residual method is used to estimate capital flight from nine countries in this region.Our estimates indicate that Asian countries has lost significant resources to capital flight and the net unrecorded capital outflow is on the rise An empirical model is set up to investigate the determinants of capital flight,using quasi-analysis of variance to remove the endogeneity associated with the lagged dependent variable.Among other things,financial crisis and trade are found to significantly drive capital out while government consumption curbs capital flight.