Flight Capital as a Portfolio Choice.
Among 51 countries studied, there are large regional differences in the proportion of private wealth held abroad, ranging from 3 percent in South Asia to 39 percent in Africa. Three variables explain capital flight in Africa: exchange rate overvaluation, adverse investor risk ratings, and high indebtedness. Collier, Hoeffler, and Pattillo examine flight capital in the context of portfolio choice. They estimate the stock of flight capital held abroad and compare it with the stock of real (nonf...Expand abstract
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