The Impact of Capital Flight on Economic Growth in Bangladesh

Abstract

In this study I investigate the impact of capital flight on economic growth. This issue has raised a great discussion in both, theoretical and empirical literature. However, estimates of capital flight for all developing countries in the world have become available only recently. I use this newly available data set, consisting of 139 countries for the period of 2002-2006 and find that capital flight has a negative impact on GDP growth. However, its significance is ambiguous. The results are not robust to specifications, which account for region or year effects.