Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia

Understanding the very factors that influence massive capital outflow from an economy is vitally important as it may assist decision makers in formulating effective strategies which can not only mitigate such capital flight but also slow down the deterioration of the economy and even re-generate i...

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Main Authors:	Noor Azryani Auzairy, Chan Soh Fun, Tan Li Ching, Soo Bow Li, Chua Siew Fung
Format:	Article
Language:	English
Published:	School of Social, Development and Environmental Studies, Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia 2016
Online Access:	http://journalarticle.ukm.my/9825/ http://journalarticle.ukm.my/9825/ http://journalarticle.ukm.my/9825/1/18x.geografia-si-feb16-azryani-edam_%281%29.pdf

id	ukm-9825
recordtype	eprints
spelling	ukm-98252016-12-14T06:50:57Z http://journalarticle.ukm.my/9825/ Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia Noor Azryani Auzairy, Chan Soh Fun, Tan Li Ching, Soo Bow Li, Chua Siew Fung, Understanding the very factors that influence massive capital outflow from an economy is vitally important as it may assist decision makers in formulating effective strategies which can not only mitigate such capital flight but also slow down the deterioration of the economy and even re-generate it. This paper analyzed the dynamic interaction between macroeconomic fundamentals and capital flight using co-integration and vector auto-regression. The macroeconomic fundamentals considered were exchange rates, consumer price index, gross domestic products and interest rates. The results show that macroeconomic fundamentals and capital flight are associated in the long run. In terms of short-run dynamics and interactions between capital flight and macroeconomic fundamentals, variations in capital flight are predominantly attributed to its own variations and exchange rate variations. Innovations in capital flight explain substantial fractions of the GDP, exchange rate, interest rate and CPI variations. School of Social, Development and Environmental Studies, Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia 2016-02 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/9825/1/18x.geografia-si-feb16-azryani-edam_%281%29.pdf Noor Azryani Auzairy, and Chan Soh Fun, and Tan Li Ching, and Soo Bow Li, and Chua Siew Fung, (2016) Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia. Geografia : Malaysian Journal of Society and Space, 12 (2). pp. 203-211. ISSN 2180-2491 http://www.ukm.my/geografia/v2/index.php?cont=a&item=2&thn=2016&vol=12&issue=2&ver=loc
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	Understanding the very factors that influence massive capital outflow from an economy is vitally important as it may assist decision makers in formulating effective strategies which can not only mitigate such capital flight but also slow down the deterioration of the economy and even re-generate it. This paper analyzed the dynamic interaction between macroeconomic fundamentals and capital flight using co-integration and vector auto-regression. The macroeconomic fundamentals considered were exchange rates, consumer price index, gross domestic products and interest rates. The results show that macroeconomic fundamentals and capital flight are associated in the long run. In terms of short-run dynamics and interactions between capital flight and macroeconomic fundamentals, variations in capital flight are predominantly attributed to its own variations and exchange rate variations. Innovations in capital flight explain substantial fractions of the GDP, exchange rate, interest rate and CPI variations.
format	Article
author	Noor Azryani Auzairy, Chan Soh Fun, Tan Li Ching, Soo Bow Li, Chua Siew Fung,
spellingShingle	Noor Azryani Auzairy, Chan Soh Fun, Tan Li Ching, Soo Bow Li, Chua Siew Fung, Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia
author_facet	Noor Azryani Auzairy, Chan Soh Fun, Tan Li Ching, Soo Bow Li, Chua Siew Fung,
author_sort	Noor Azryani Auzairy,
title	Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia
title_short	Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia
title_full	Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia
title_fullStr	Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia
title_full_unstemmed	Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia
title_sort	dynamic relationships of capital flight and macroeconomic fundamentals in malaysia
publisher	School of Social, Development and Environmental Studies, Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia
publishDate	2016
url	http://journalarticle.ukm.my/9825/ http://journalarticle.ukm.my/9825/ http://journalarticle.ukm.my/9825/1/18x.geografia-si-feb16-azryani-edam_%281%29.pdf
first_indexed	2023-09-18T19:55:49Z
last_indexed	2023-09-18T19:55:49Z
_version_	1777406521228918784

Dynamic relationships of capital flight and macroeconomic fundamentals in Malaysia

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