Projects

Capital Flight and its Impact on the Slovak Economy

Prof. Dr. Ing. Menbere Workie Tiruneh, PhD.

Members of project
Prof. Dr. Ing. Menbere Workie Tiruneh, PhD., Ing. Mária Širaňová, MA., PhD., Ing. Filip Ostrihoň, PhD., prof. Ing. Saleh Mothana Obadi, PhD., doc. Ing. Martin Lábaj, PhD., Jana Kotlebová, doc. Ing. Daniel Dujava, PhD.

• Basic informations
• Characteristics

• Duration of the project: 07/2016 - 12/2019
  ID number: APVV-15-0666

• In the context of liberalization of global capital mobility, sophisticated world financial systems and expansion of information and communication technology, capital flight appears to be of the main bottlenecks not only for developing but also for advanced economies as well. This trend has been worsening during and in the aftermath of the global economic and financial crisis. While estimates on the size of capital exist for some developing countries (Global Financial Integrity, World Bank), there is almost none when it comes to advanced countries including Slovakia. The proposed project will contribute in advancing the underlined topic to a new level in three ways. The first contribution of the project is in modifying existing methods to estimate the size of capital flight from Slovakia and EU member states. The major added value of the project is the introduction of new models that have not been used so far to estimate the size of capital flight (input-output model, flow of funds analysis, and network analysis). Furthermore, the project will identify and quantify the macroeconomic factors (determinants) that provoke capital flight (using logit model, cointegration, Granger causality, VAR and VECM models). Thirdly, the project will estimate the macroeconomic consequences of capital flight for the Slovak economy and other EU member states using growth models. Lastly, the project aims to offer a macroeconomic framework of understanding the phenomena of capital flight in the era of relatively free global capital mobility across countries and summarizes some policy recommendations to curb if not eliminate the size of capital flight.