dc.contributor.author | Bosupeng, Mpho | |
dc.contributor.author | Dzator, Janet | |
dc.contributor.author | Nadolny, Andrew | |
dc.date.accessioned | 2022-03-22T23:18:17Z | |
dc.date.available | 2022-03-22T23:18:17Z | |
dc.date.issued | 2019 | |
dc.identifier.issn | 1911-8066 | |
dc.identifier.doi | 10.3390/jrfm12020101 | |
dc.identifier.uri | http://hdl.handle.net/10072/413479 | |
dc.description.abstract | This study investigates the impact of exchange rate misalignment on outward capital flight in Botswana over the period 1980–2015. The study uses the autoregressive distributed lag (ARDL) approach to cointegration and the Toda and Yamamoto (1995) approach to Granger causality. Botswana’s currency misalignment was caused by current account imbalances. The most important determinant of capital flight from Botswana is trade openness, which indicates that exportable commodities are misinvoiced leading to net capital outflows. Our main findings show that in the long-run, when the currency is overvalued, the volume of capital flight through trade misinvoicing declines and increasing foreign reserves does not reduce outward capital flight. However, when the currency is undervalued, the volume of capital flight through trade misinvoicing increases and foreign reserves reduce outward capital flight. Investors respond more to prospects of devaluation than to inflation. Botswana should tolerate overvaluation of the pula of only up to 5%. When the pula is overvalued beyond 5%, capital flight increases substantially. The government has to formulate trade regulations and monitor imported and exported commodities. Botswana should also implement capital controls to limit capital smuggling and maintain monetary autonomy. | |
dc.description.peerreviewed | Yes | |
dc.language | English | |
dc.publisher | MDPI | |
dc.relation.ispartofpagefrom | 101 | |
dc.relation.ispartofissue | 2 | |
dc.relation.ispartofjournal | Journal of Risk and Financial Management | |
dc.relation.ispartofvolume | 12 | |
dc.subject.fieldofresearch | Banking, finance and investment | |
dc.subject.fieldofresearchcode | 3502 | |
dc.subject.keywords | Social Sciences | |
dc.subject.keywords | Business, Finance | |
dc.subject.keywords | Business & Economics | |
dc.subject.keywords | real exchange rate | |
dc.subject.keywords | exchange rate misalignment | |
dc.title | Exchange Rate Misalignment and Capital Flight from Botswana: A Cointegration Approach with Risk Thresholds | |
dc.type | Journal article | |
dc.type.description | C1 - Articles | |
dcterms.bibliographicCitation | Bosupeng, M; Dzator, J; Nadolny, A, Exchange Rate Misalignment and Capital Flight from Botswana: A Cointegration Approach with Risk Thresholds, Journal of Risk and Financial Management, 2019, 12 (2), pp. 101 | |
dcterms.license | https://creativecommons.org/licenses/by/4.0/ | |
dc.date.updated | 2022-03-22T22:51:45Z | |
dc.description.version | Version of Record (VoR) | |
gro.rights.copyright | © 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. | |
gro.hasfulltext | Full Text | |
gro.griffith.author | Bosupeng, Mpho | |