Capital flight and its effect on private investment: empirical evidence from Ethiopia
Journal: Journal of Innovation and Entrepreneurship
Year: 2025

This study examines the impact of capital flight on private investment in Ethiopia over the period 1970–2020, estimating the magnitude of capital flight at $80 billion, or approximately $1.5 billion annually. Using the ARDL bounds testing approach, we find that capital flight significantly hinders domestic investment financing in both the short and long run. In addition, government spending, foreign exchange reserves, and bank credit to the private sector complement private investment in the lon