Open AccessThe Impact of Capital Flight on Economic Growth and Financial Stability in Palestine
Author(s) -
Nemer Badwan
Publication year - 2021
Publication title -
asian journal of economics, business and accounting
Language(s) - English
Resource type - Journals
ISSN - 2456-639X
DOI - 10.9734/ajeba/2021/v21i1130446
Subject(s) - capital flight , foreign direct investment , government (linguistics) , investment (military) , business , foreign portfolio investment , finance , economics , exchange rate , economic policy , monetary economics , international economics , open ended investment company , macroeconomics , return on investment , market economy , production (economics) , linguistics , philosophy , politics , political science , law , incentive
This study examined the impact of Capital Flight on Economic Growth and Financial Stability in Palestine from the period (2000-2020). The time series data of Capital Flight, Foreign Exchange Reserves, Foreign Debt, and Real GDP used in the study, and the use of ordinary least squares estimation technology to analyze the research data. Carried out Johansen co-integration and error correction mechanism. The evidence of the research results shows that there is a co-integration relationship between the research variables, and Capital Flight has harmed the Economic Growth of the Palestinian case. Based on these findings, the study recommends that the government should provide a favorable investment environment to encourage investment and prevent Capital Flight from Palestine. In addition, the Palestinian Government should also prevent Capital Flight because these Infrastructure Projects/Programs will reduce the country’s production costs. The government should create a suitable investment environment for foreign investment and encourage entrepreneurs and equity owners to invest these funds domestically. In addition, the government should use all Foreign Aid funds in appropriate places to increase the Economic Growth Rate and create job opportunities for the unemployed, thereby increasing the National Economic Growth Rate.