Deterrents of capital outflow. Evidence of Russia
| Název práce v češtině: | Překážky odlivu kapitálu. Příklad Ruska. |
|---|---|
| Název v anglickém jazyce: | Deterrents of capital outflow. Evidence of Russia |
| Klíčová slova: | odliv kapitálu; post-sovětské státy; Rusko; inflace; korporátní zdanění; daňové ráje |
| Klíčová slova anglicky: | outflow of capital; post-soviet countries; Russia; inflation; corporate taxation; tax havens |
| Akademický rok vypsání: | 2020/2021 |
| Typ práce: | diplomová práce |
| Jazyk práce: | angličtina |
| Ústav: | Institut ekonomických studií (23-IES) |
| Vedoucí / školitel: | prof. PhDr. Ing. Antonie Doležalová, Ph.D. |
| Řešitel: | skrytý - zadáno vedoucím/školitelem |
| Datum přihlášení: | 30.06.2021 |
| Datum zadání: | 30.06.2021 |
| Zásady pro vypracování |
| The problems of capital outflow and capital reinvestment are incredibly complex yet essential to understand the trajectory of economic and political development of the countries. As noted by numerous earlier studies (e.g., Yasin, 1996; Fituni, 2003), reducing the volume of capital outflow from a country and stimulating its reinvestment will help ensure sustainable economic growth in the country. Moreover, it is not possible to only focus on capital reinvestment as the presence of a high level of capital outflow would significantly reduce the efficiency of reinvestment-focused policies (Vovk, 2008).
The primary focus of this thesis is to understand the phenomenon of capital outflow, including its causes, and to find economic factors that could potentially act as strong deterrents to this issue. According to portfolio-choice theory one of the key drives of the outflow of capital is the risk-adjusted expected return. Factors that might influence return on non-indexed assets are likely to be associated with capital outflow. For instance, Cuddington (1986) found that capital outflow is affected by both domestic and foreign interest rate, and Liew et al. (2016) discovered that it is also affected by factors such as Foreign Direct Investment and stock market performance. Withing the studied framework are chosen three macroeconomic variables and their potential effect is hypothesized to be as follows: Hypothesis #1: Reduction of inflation level would lead to a decrease of capital outflow. Hypothesis #2: Reduction of corporate tax would lead to a decrease of capital outflow. Hypothesis #3: Reduction of government debt would lead to a decrease of capital outflow. Given that it is argued that the causes of capital outflow are often different between countries (e.g., Erbe, 1985), it is also unlikely to reach a generalized conclusion on what could be an efficient deterrent of capital outflow that would be applicable to every country. Thus, instead of investigating this phenomenon globally, this thesis would focus on one country only: Russia. The country of choice is rich in its economic history, which allows analyzing the development of various scenarios over the span of thirty years. Moreover, according to Zucman et al. (2018), Russia currently has one of the highest levels of offshore wealth, which also held true over the course of these years. The above two factors imply that the conclusions drawn in this thesis can still, to some degree, be applied to other countries. The post-soviet environment is also a perfect setup to test the hypotheses about the influence of macroeconomic variables on capital outflow as the public may use levels of government debt, inflation and/or corporate tax as either a signal for a post-soviet government’s commitment to sound economic management and reform, or lack of such commitment. The empirical research would be conducted using the extensive data from the database of the Central bank of the Russian Federation, which contains the relevant year-to-year information on inflation, government debt, corporate tax level, as well as the levels of capital outflow and inflow. This thesis would also use the publicly available estimate of the offshore wealth of Russia provided by Zucman et al.. According to the researchers, this estimate is based upon a transparent method that uses the significant cumulated "errors and omissions" residual in Russia's balance of payment. The expected contribution of this thesis is twofold. Firstly, given the notable scarcity of studies concerning the outflow of capital from post-soviet countries, this thesis would shed light on the origins and dynamics of the problem of capital outflow from post-communist countries. Secondly, unlike those studies that focus mainly on the measure of capital outflow causes, this thesis would investigate its potential deterrents, providing valuable insights to the policy-makers. |
| Seznam odborné literatury |
| Annette, Johannesen, and Gabriel Zucman. “Tax Evasion and Inequality.” American Economic Review 109, no. 6 (June 1, 2019): 2073–2103. https://doi.org/10.1257/aer.20172043.
Cuddington, John T. Capital Flight: Estimates, Issues, and Explanations. Princeton Studies in International Finance, no. 58 (Dec. 1986. Princeton, N.J: International Finance Section, Dept. of Economics, Princeton University, 1986. Erbe, Susanne. “The Flight of Capital from Developing Countries,” n.d., 9. Johannesen, Niels, Gabriel Zucman, and Niels Alstadsæter. “Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality.” Journal of Public Economics 162 (June 2018): 89–100. https://doi.org/10.1016/j.jpubeco.2018.01.008. Liew, Siew-Ling, Shazali Mansor, and Chin-Hong Puah. “Macroeconomic Determinants of Capital Flight: An Empirical Study in Malaysia” 10 (January 1, 2016): 2526–34. Zucman, Gabriel, Thomas Piketty, and Filip Novokmet. “From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016.” The Journal of Economic Inequality 16, no. 2 (June 2018): 189–223. https://doi.org/10.1007/s10888-018-9383-0. Вовк, Антон. “Бегство Капитала Из России и Его Реинвестирование.” Вестник Санкт-Петербургского Университета. Экономика, no. 3 (2008): 155–59. Фитуни, Л. Л. “Теневой оборот и ‘бегство капитала,’” 2003. https://istina.msu.ru/publications/book/710974/. Ясин, Е. Г. Как поднять экономику России. Вита-Пресс, 1996. |
| Předběžná náplň práce |
| Introduction
Literature review and development of hypotheses Sample selection and research design Empirical results Summary and conclusion Bibliography Appendix |
| Předběžná náplň práce v anglickém jazyce |
| Introduction
Literature review and development of hypotheses Sample selection and research design Empirical results Summary and conclusion Bibliography Appendix |