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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/9825/1/18x.geografia-si-feb16-azryani-edam_%281%29.pdf
http://journalarticle.ukm.my/9825/
http://www.ukm.my/geografia/v2/index.php?cont=a&item=2&thn=2016&vol=12&issue=2&ver=loc
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spelling my-ukm.journal.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
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
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/9825/1/18x.geografia-si-feb16-azryani-edam_%281%29.pdf
http://journalarticle.ukm.my/9825/
http://www.ukm.my/geografia/v2/index.php?cont=a&item=2&thn=2016&vol=12&issue=2&ver=loc
_version_ 1643737917432004608
score 13.211869

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