**3. Results**

#### *Hip Flexion Angle*

There was a 3-way interaction of time x stretching protocol x group (*p* = 0.041, η2 = 0.157). As shown in Figure 3, the intermittent stretching protocol significantly increased hip flexion angle in gymnasts and team sports athletes compared to baseline, by 6% and 13% (+8.2◦ ± 6.3◦, 95% CI = +5.5 to +11.0◦, *p* = 0.029, Cohen's *d* = 0.43 and +11.40◦ ± 16.3◦, 95% CI = +2.6◦ to +20.2◦, *p* = 0.001, Cohen's *d* = 0.97, respectively). In contrast, the continuous stretching protocol resulted in an increase in hip flexion only in gymnasts by 6%, while no increase was observed in team sport athletes (+7.7◦ ± 5.5◦ *p* = 0.047, 95% CI= +5.2◦ to +10.2◦, Cohen's *d* = 0.41 vs, +1.0◦ ± 4.5◦, *p* = 0.99, 95% CI = −1.1◦ to +3.1◦, Cohen's *d* = −0.09, respectively; see Figure 3).

**Figure 3.** Hip flexion angle of gymnasts and team sport athletes during the intermittent and the continuous static stretching pre- and post-stretching intervention. Data are mean ± standard deviations of the mean. \* *p* < 0.01 and *p* < 0.05 from pre-stretching.


Impact of Capital Flight on Economic Growth of Nigeria (1980–2014)

Fatima Muhammad Lawal and Arzuhan Burcu Gültekin

#### Abstract

This chapter evaluated the impact of capital flight on economic growth of Nigeria using autoregressive distributed lag (ARDL) technique and a secondary source of data over a period of 35 years (1980–2014). The chapter also examines the causal relation between capital flight and economic growth using Granger causality test. The long run estimates of the variables using ARDL model reveals that capital flight has a negative effect on economic growth of Nigeria, while the result of the Granger causality test reveals a bi-directional causal relationship between capital flight and economic growth. Based on empirical findings, the chapter suggests the need for policies to impose the economic growth thatreduces the flight of capital to an increase in economic growth. More generally, the chapter also recommends that a new overall strategy, political, and public policies should be made more stable and certain in the country. This will make investors to be rest assured about the impact of these policies/ strategies on the real value of their domestically held assets in the future and to encourage Nigerians abroad to come back home and invest in the country.

Keywords: capital flight, ARDL, economic growth, Granger causality, Nigeria

#### 1. Introduction

Capital flight is the outflow of huge capital in the form of money from country to country. Capital flight has frequently been regarded as the economic reaction to the portfolio choices of wealth resident of some debtor countries in recent years [1]. In the words of [2], capital flight is an unlawful movement of funds from one country to another. Certainly, it is an unusual flow of capital, as the government does not sanction it. This is because exchange of capital controls imposed by the particular country is not adhered to. Capital flight weakens sustainable development in different ways, both directly and indirectly. It drains domestic savings, depresses capital accumulation which is the key driver of long-term growth. Capital flight weakens sustainable development because it reduces government resources, thus weakening financial public infrastructure and the provision of social services.

The Nigerian economy faces massive financial hemorrhage because politicians, foreign investors, and corporate bodies shift funds to foreign countries and convert from Naira to the dollar [3]. According to [4], the imperative question is the reason why capital flight from Nigeria has gained so much importance over the years. Giant capital flight from the country has been linked to a large balance of payment

deficit, which regularly leads to globalization and consequently the enormous impact of exchange rate speculation [5, 6]. For the developing countries, a vital economic result of globalization has been the enormous and unique outflows of foreign private capital.

According to [7], the movement of capital flight in Nigeria was more obvious between September and November 2009 when a number of billions of US Dollars was obtained through the banks and bureaux-de-change. Through this period, a sum of USD13.894 billion (₦2,153.57 billion) left the country. Going by the report presented at the Central Bank of Nigeria, between January 22, 2010 and March 5, 2010, a sum of USD6.734 billion (₦1,043.77 billion) left the country.

In another edition of the Vanguard Newspaper [3], payments made by the CBN on behalf of the public shows that a total of USD22.1 billion left the country in 5 weeks, with an average of USD4.5 billion in a week. So also, about USD3.083 billion left the country by the end of the month of July 2014. The total foreign exchange flowing out of the country mounted to USD4.2 billion by the end of the month of August 2014. It however falls to USD4.1 billion by the end of September and rise astronomically to USD5.29 billion at the end of October 2014. The foreign exchange outflow rose further up to USD5.35 billion by the end of November 2014.

In Nigeria, there has been a growing difficulty in capital flight over the years due to economic growth and development, and common research has been conducted on this dilemma [8–12]. Likewise, the desire to solve this dilemma remains somber. While the intensity of low capital inflows is said to suppress the level of economic growth and hinder economic development in any economy, high capital inflow intensity encourages capital formation. This is the basis for economic growth and improves the level of significant investment that promotes higher returns. In the case of capital outflow, it is usually money running away from the country. In detail, increased capital outflows represent a possible loss for economic growth and development, particularly in a country deeply dependent on external financing and/ or international supports/aids [8].

The capital flight in Nigeria led to the fall of Naira's exchange rate until the beginning of 2015 and the collapse of international crude oil prices in late 2014 [3]. Moreover, the flight of capital caused the depletion of Nigeria's foreign reserves and consequently the weakening of Naira. Nigeria's foreign exchange reserves, which amounted to USD5.4 billion in 1999, increased to USD52.3 billion, a large portion of USD52 billion by the end of 2007, and to USD53.0 billion in 2008. However, in 2008, after the collapse of the international crude oil price and the global financial crisis, the reserve declined to USD42.4 billion in 2009. Moreover, in February 2015, it decreased to USD33.04 billion from USD38.138 billion at the end of April 2014 [3].

The Nigerian government has launched programs and policies aimed at increasing foreign capital inflows to other countries in order to use the appropriate contribution to the whole economy in previous periods. The founding of the Bureau of Public Enterprises (BPE), Nigerian Investment Promotion Commission (NIPC), National Council on Privatization (NCP), Economic and Financial Crime Commission (EFCC), and other anti-regulatory bodies aim to encourage economic growth and development of the nation's economy [9]. But, it turned out that these high targets were an illusion.

The objectives of this chapter are to identify the long-run implications/effect of persistence capital flight on the Nigerian economic growth and to capture the short comings observed in the literature by identifying the direction of causality between capital flight and economic growth in Nigeria. In order to achieve these objectives, this chapter is structured into five sections. Following introductory section, Section 2 focuses on the review of related literature, Section 3 provides data and methodology, Section 4 presents the results of analysis, and Section 5 concludes the chapter.

Impact of Capital Flight on Economic Growth of Nigeria (1980–2014) DOI: http://dx.doi.org/10.5772/intechopen.87836

#### 2. Literature review

This section includes two sub-sections. The first sub-section is about the theoretical framework the study providing the review of theories. The second one is the empirical review of previous studies.

#### 2.1 Theoretical framework

There are various economic theories in the background of capital flight used to measure the impact of capital flight on the economic growth. However, the theoretical framework of this chapter focuses on four main theories, as emphasized by [9, 13, 14]. These four theories, defined in the area of capital flight, include the investment orientation thesis; the debt-driven capital flight thesis (the debtoverhang thesis); tax depressing thesis; and the thesis that produces austerity.

#### 2.1.1 The investment diversion theory

The assumption of this theory is that because of political and macroeconomic uncertainty in countries that are developing and also due to the concurrent presence of a more better investment opportunities in countries that are advanced like the presence of foreign interest rate that are high, the existence of economic and political stability, a wide variety of financial instruments, a favorable secrecy of accounts and tax climate, some immoral leaders that are corrupt and bureaucrats regularly drain off the limited capital resources to advanced countries from their home countries and as such, these resources become scarce for general investment in the home country leading to a fall in the general investment level, a fall in the growth rate of the economy and hence, a fall in the employment rate, a rise in dependency ratio, and increase in the rate of deaths. These negative effects sometimes necessitate lending from abroad in order to boost the domestic activities of an economy, which is also sometimes further drain off through corruption bringing about indebtedness and external dependency. Liquidity limitation or crowding results may lead to a decline in the value of the local currency, provided that the authorities operate a variable exchange rate system [5]. Efforts to defend the exchange rate at this time, results to, loss of international reserves. Now, exchange rate defense efforts lead to the loss of international reserves. The investment diversion thesis presents one of the known negative sequences of flight capital in the respective countries [9].

#### 2.1.2 The debt-driven capital flight thesis

This is an extension of the investment diversion thesis. The theory assumes that a country having heavy external debt will motivate the inhabitants to move their funds to foreign countries. External debt is sold to economic domestic agents who later transfer these resources completely or partly abroad. External debt in accordance to this thesis is one of the influencing factors to flight capital.

#### 2.1.3 The tax-depressing thesis

This theory assumes that home resources held abroad are no more in control of the domestic government and can therefore not be taxed. Subsequently, capital flight brings about a potential loss of revenue to the home country. The decrease in the government revenue affects the fiscal activities to promote growth and

development. These results to increase in the debt burden of a country as a result of decrease in the debt servicing ability of the government which hinders economic growth and development. Thus, a direct consequence of flight capital is a reduction in the government's income-generating potential [14].

#### 2.1.4 The austerity thesis

This theory is concerned with the various indebted situations of the poor as a result of flight capital. The poor suffer more as a result of excessive exposure to very painful and rigorous measures to pay for debt obligations by the government to international banks that on the other hand render interest to flight capital from inhabitants of these countries [15]. In developing countries, poverty influences international dependency and inequality reducing the poor to drawers of water and hewers of wood. It also bridges the gap between the poor and the rich countries. The investment diversion theory and the debt-driven capital flight thesis are both related to this study and thus, we base the foundation of this work to these theories.

#### 2.2 Review of empirical literature

Some empirical evidence from developing countries shows some negative impact of capital flight on gross domestic product (GDP). For instance, ARDL method was adopted in [16] on data set of 139 developing countries to analyze the impact of the capital flight on growth of real GDP over the period of 2002 through 2009. It was found that the capital flight has negative impact on GDP growth, of which significance can be stated as ambiguous. Furthermore, the proposed results are not robust according to the specifications considering the effects of the region or year.

Marianna [17] aimed to analyze the impact of capital flight on long-term economic growth. The researcher employed a pooled cross-section analysis based on the fixed effects model estimated by feasible generalized least squares method using different methodologies for a set of 75 countries between 1994 and 2003 and presented the results. According to the results, the countries, which have higher capital flight to GDP ratio, have experienced slower growth of GDP per capita and poorer countries were punished more by the phenomena. The researcher also suggests that significant steps should be taken for a flight relief or even reversal of capital flight to occur and in order to avoid the causes of capital flight, which includes economic policies, political stability, and institutional developments. It is also suggested that other key issues need to be taken into account in order to stabilize the stability of inflation. Since this is a significant determinant of flight and growth, transparent taxation is the process of foreign capital treatment of domestic capital, supporting domestic market, as well as balancing state spending.

There are also some reviews from the African continent. For example, [14] predicted the measurements, determinants, and impacts of capital flight on real economic growth in Cameroon. In this study, two-stage least-squares technique was used after the co-integration error correction mechanism of [18] using time series data from 1970 to 2005. Quantitative results show that the large capital outflows from Cameroon stem from fiscal deficit, political instability, interest rate inflation and external debt servicing GDP ratio. It is also reported that capital flight has a negative impact on economic growth. Consequently, it is found out that growth and development in Cameroon can be achieved and sustained through alleviation of capital flight. Therefore, the combinations of the establishment of fiscal discipline, tax and tariff adjustments, and good governance are recommended.

#### Impact of Capital Flight on Economic Growth of Nigeria (1980–2014) DOI: http://dx.doi.org/10.5772/intechopen.87836

Using different estimation methods, the magnitude of capital flight in Kenya was analyzed in [19]. The causal factor of capital flight, which gives importance to macroeconomic variables, has been determined empirically. This capital flight reached its peak in the balance of payments crisis. This means that capital flight is used for protection against bad economic conditions. Besides, it was debated that growth in economy would lead to increase capital flight without credible reforms. Some reviews from the Nigeria's perspective are also identified. Adaramola and Obalade [20] used the ordinary least square regression and the Johansen co-integration test on macroeconomic data to examine the impact of capital flight on Nigerian economic growth for the period of 1981–2010. The authors found that capital flight has negative impact on economic growth only in the short run. In addition, the capital flight significantly and positively impacted the economic growth in the long run. It was recommended that creating friendly and enabling business environment is a method of encouraging foreign investors to invest in the country as well as re-investing the profits based on the empirical findings.

Margaret [8] employ the least square regression model in the analysis of capital flight determinants and their impact on Nigerian economy from 1970 to 2004, her findings reveal that capital flight exerts a negative impact on Nigeria's economic development; it also reveals that 6 of the 12 explanatory variables exert some significant effects on the economic development. These include the total export, terms of trade, type of government, growth rate differential, inflation and sum of import and export as a ratio of GDP. The study finally recommends among others, that the government should formulate polices to maintain stability in the microeconomic environment that is economic, political, and social stability.

The impacts of capital flight on economic growth are analyzed by evidence from the Nigerian economy in [9]. Ordinary least squares technique, multiple regression, and descriptive statistics were used. It was found out that the outflow representing capital flight and errors and omission have an inverse relationship with gross domestic product (GDP) representing the overall economic growth in the Nigerian economy. Good governance, full implementation of fiscal discipline, and change of attitude in the national economy management were also proposed. It was proposed that protection laws for Nigerians should be enacted so that they could bring their stolen money back home and invest in the real sector of the economy.

Contrary to most of the existing capital flight studies, [11] examined the capital flight impact on exchange rate and economic growth in Nigeria by using OLS method on secondary data between 1981 and 2007. The results indicated that the capital flight has statistically significance and positive impact on the exchange rate and economic growth of Nigeria, which contradict previous studies. Based on the findings, it is recommended that more training is needed for the Nigerian traditions to increase efficiency in combating import and export faults. Furthermore, [21] empirically evaluated the capital flight impact on Nigeria economy using two-stage least square technique between 1970 and 2008. The capital flight reported a significant and negative impact on economic growth in the estimated model. According to the findings, nonperformance of domestic resources can spark capital flight.

#### 3. Data and methodology

This study uses a time series secondary data which was sourced from the publications of World Bank and United Nations Conference on Trade and Development (UNCTD) with a sample size of 35 years from 1980 to 2014). The study adopts a model from [21] with some modification. The dependent variable used is real GDP which serves as a proxy for economic growth. The independent variables used are

Capital flight proxied by capital outflows, Domestic investment proxied by private investment, External debt, Exchange rate, and Foreign Direct Investment. The functional representation of the model for this study is as follows;

$$RGDP = F(KF, \text{EXP}, \text{DOIN}, \text{EXP}, \text{FDI}) \tag{1}$$

The econometric equation of the above function becomes as follows:

$$RGDP = \beta\_0 + \beta\_1 \text{KF} + \beta\_2 \text{EXD} + \beta\_3 DONN + \beta\_4 \text{EXR} + \beta\_5 \text{FDI} + e\_t \tag{2}$$

where RGDP is the real gross domestic product; KF is the capital flight; EXD is the external debt; DOIN is the domestic investment; EXR is the exchange rate; FDI is the foreign direct investment; β0 is the constant parameter; β1�β5 are the coefficient of independent variables; εt is the error term.

In order to empirically analyze the long-run relationships and short-run dynamic interactions among the variables of interest (gross domestic product, capital flight, exchange rate, external debt, domestic investment, and foreign direct investment), the autoregressive distributed lag (ARDL) cointegration technique was applied as a general vector autoregressive (VAR) model of order p, in Zt, where Zt is a column vector composed of the six variables: Zt = (RGDP, KF, EXD, DOIN, EXR, FDI). The ARDL cointegration approach was developed by [22].

A further advantage of the ARDL model over the previous and traditional cointegration methods are all variables of the model assumed to be endogenous and the short-run and long-run coefficients of the model are estimated simultaneously [23]. An ARDL representation of Eq. (3) is formulated as follows:

$$\begin{split} \Delta \text{RGDPt} &= a0 + \sum\_{i=1}^{n} a \text{i} \text{i} \Delta \text{RGDPt} - 1 + \sum\_{i=0}^{n} a \text{i} \text{i} \Delta \text{KPt} - 1 + \sum\_{i=0}^{n} a \text{i} \text{i} \Delta \text{EXD} - 1 \\ &+ \sum\_{i=1}^{n} 4i \text{i} \Delta \text{DOIt} - 1 + \sum\_{i=0}^{n} 5i \text{i} \Delta \text{KPt} - 1 + \sum\_{i=0}^{n} 6i \text{i} \text{i} \text{i} \text{FDIt} - 1 \\ &+ \beta \text{1RGDPt} - 1 + \beta \text{2KPt} - 1 + \beta \text{3EDt} - 1 + \beta \text{4DOInt} - 1 + \beta \text{5ERPt} - 1 \\ &+ \beta \text{6FDIt} - 1 + \text{et.} \end{split}$$

where Δ denotes the first difference operator, α0 is the drift component, et is the usual white noise residuals.

(3)

The first until fifth expressions (β1–β6) on the right-hand side match up to the long-run relationship, while the other expressions with the summation sign (α1 � α6) show the short-run dynamics of the model.

Bound testing procedure is used to investigate the presence of long-run relationships among the RGDP, KF, EXD, DOIN, EXR, and FDI [22]. This procedure is based on the F-test. The F-test is a test of the hypothesis of no cointegration among the variables against the existence or presence of cointegration among the variables that is denoted as:

6 6 6 6 6 6 Ho: β1 = β2 = β3 = β4 = β5 = β6 = 0. that is, there is no cointegration among the variables. Ha: β1 ¼ β2 ¼ β3 ¼ β4 ¼ β5 ¼ β6 ¼ 0. that is, there is cointegration among the variables.

The ARDL bound test is based on the Wald-test (F-statistic). The asymptotic distribution of the Wald-test is non-standard under the null hypothesis of no cointegration among the variables. For the cointegration test, two critical values are given by [22]. The lower critical bound assumes that all the variables are I(0), which means that there is not any cointegration relation between the examined variables.

Impact of Capital Flight on Economic Growth of Nigeria (1980–2014) DOI: http://dx.doi.org/10.5772/intechopen.87836

Additionally, the upper bound assumes that all the variables are I(1) meaning that there is cointegration between the variables. H0 is rejected when the computed Fstatistic is greater than the upper bound critical value (the variables are cointegrated). H0 cannot be rejected if the F-statistic is below the lower bound critical value (there is no cointegration among the variables). The results can be mentioned as inconclusive when the computed F-statistics is between the lower and upper bound. Furthermore, unrestricted error correction model (UECM) based on the assumption made by [22] is developed in this chapter. From the unrestricted error correction model, the long-run elasticities are the coefficient of the one lagged explanatory variable (multiplied with a negative sign) divided by the coefficient of the one lagged dependent variable. The ARDL has been selected because of the reason that it can estimate the long- and short-run dynamic relations among all the variables used and can be applied for a small sample size. The ARDL methodology is considered as to be relieved of the burden of establishing the order of integration between the variables. Moreover, it permits testing the existence of relation among the variables and can differentiate dependent and explanatory variables. Consequently, it is inclinable that various variables have different optimal number of lags with the ARDL. Accordingly, Eq. (3) in the ARDL version of the error correction model can be expressed as Eq. (4). The error correction version of ARDL model pertaining to the variables in Eq. (3) is as in the following:

$$\begin{aligned} \Delta \text{RGDPt} &= a \text{O} + \sum\_{i=0}^{n} a \text{Li} \Delta \text{RGDPt} - \text{1} + \sum\_{i=0}^{n} a \text{2i} \Delta \text{KFt} - \text{1} + \sum\_{i=0}^{n} a \text{3i} \text{4EXDt} - \text{1} \\ &+ \sum\_{i=1}^{n} 4i \text{ADOINt} - \text{1} + \sum\_{i=0}^{n} 5i \text{AEXRt} - \text{1} + \sum\_{i=0}^{n} 6i \text{ADI}t - \text{1} \\ &+ \lambda \text{ECt} - \text{1} + ut \end{aligned} \tag{4}$$

where λ is the speed of adjustment parameter and EC is the residuals that are obtained from the estimated cointegration model of Eq. (3).

#### 4. Results

#### 4.1 Unit root test result

The study investigated the stationary level of the variables under study in order to ensure that none of the variables are integrated beyond order one [I(1)]. For this purpose, this study adopted the conventional Augmented Dickey-Fuller (ADF) test. The result of the unit root test in Table 1 shows that the variables were stationary at different order of integration.

The table reveals that LOGRGDP (the study dependent variable), LOGDOIN, LOGEXD, and KF are all stationary at differenced value I(1) while FDI is stationary at level value 1(0). This shows that our result has a mixture of I(1) and 1(0) variables and this explains one of the advantage of using ARDL method of estimation as the method allows a mixture of 1(1) and 1(0) variables as regressors. In other words, the order of appropriate variables integration may not be the same necessarily. Hence, the ARDL technique is advantageous for not involving identification of the order of the fundamental data.

#### 4.2 Estimated long-run co-efficient

The long-run ARDL result from Table 2 reveals that capital flight is negatively related to economic growth at �1.59. This implies that an increase (decrease) in

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#### Table 1.

Unit root test result.

#### Table 2.

Result of estimated long-run co-efficient (dependent variable; real GDP).

capital flight will lead to a decrease (increase) in economic growth. For instance, a unit rise in capital flight will lead to about ˜1.59 decreases in economic growth (ceteris paribus).

The result also reveals a positive and insignificant relationship between external debt and economic growth. This is not surprising considering the quality of institutions in Nigeria that encourage rent-seeking behaviors among political office holders because sometimes foreign loans are not injected into the right channels necessary for growth but being transformed sometimes instantaneously from capital inflow to capital flight through corruption or selling to domestic economic agents and ultimately ending up abroad, usually in a private foreign account having no significant effect to economic growth.

However, the result identifies a positive and significant relationship between domestic investment and economic growth. This shows that an increase (decrease) in domestic investment will lead to an increase (decrease) in economic growth of Nigeria. In other words, a unit rise/fall in domestic investment will lead to a 0.000131 rise/fall in economic growth. The result also reveals that this is statistically significant at 1% level going by its p-value of 0.0000.

Furthermore, foreign direct investment displays a negative and significant impact on economic growth. A decrease (increase) in FDI will lead to an increase (decrease) in economic growth signifying an inverse relationship between the two Impact of Capital Flight on Economic Growth of Nigeria (1980–2014) DOI: http://dx.doi.org/10.5772/intechopen.87836

but statistically significant at 1% level given by its p-value of ˜0.0006. This further explains that a 1% change in foreign direct investment will lead to a ˜0.000170 change in economic growth.

Finally, exchange rate has a negative and significant impact on economic growth. Decrease (increase) in exchange rate will lead to an increase (decrease) in economic growth of Nigeria. In other words, a unit rise in exchange rate, will lead to a ˜0.005541 change in economic growth of Nigerian addition, this is found to be statistically significant at 1% level as shown by its p-value of 0.0115.

#### 4.3 Result of the estimated short-run relationship

The short-run nexus between capital flight, other explanatory variables and economic growth (real GDP) is estimated using the error correction model (ECM). The error correction co-efficient is ˜0.934135 and is statistically significant at 5% level going by its p-value of 0.0182. This shows a very high speed of adjustment to equilibrium level after a shock. For the explanatory variables, the short-run analysis identify the presence of a negative relationship between capital flight and economic growth and a negative and significant relationship between foreign direct investment and economic growth, a positive and significant relationship between domestic investment and economic growth, a positive and significant relationship between exchange rate and economic growth, and a positive and insignificant relationship between external debt and economic growth (Table 3).

#### 4.4 Result of the Granger causality test

The main purpose of conducting Granger causality test is to identify the nature and direction of causality between the dependent variable (Real GDP) and independent variables (capital flight, FDI, external debt, domestic investment and exchange rate). The test result is summarized and presented in Table 4.

The Granger causality result from Table 4 shows that, there is a bi-directional relationship between capital flight and real GDP at 1% level of significance

#### Table 3.

Error correction estimates of the ARDL model (short-run dynamics).

#### Table 4.

Result of the Granger causality test.

therefore; the null hypothesis of no causality between capital flight and real GDP will be rejected going by their respective p-values of 0.0001 and 0.0147. The result also shows a uni-directional relationship between FDI and real GDP. This is because at 1% level of significance, the null hypothesis that FDI does not Granger cause real GDP is rejected while on the other hand, the null hypothesis that real GDP does not Granger cause FDI could not be rejected going by its p-value of 0.8707. However, the result also identifies a no directional relationship between external debt and real GDP as shown by their respective p-values of 0.8014 and 0.6125 which are not significant even at 10% level. As such, the null hypothesis of no causality between external debt and real GDP cannot be rejected. A bi-directional causal relationship between domestic investment and real GDP has also been identified at 1% level of significance with their p-values of 0.0010 and 0.0002, respectively. Therefore, the null hypothesis of no causality between domestic investment and real GDP will be rejected. Finally, the result shows a uni-directional causal relationship between exchange rate and real GDP where exchange rate Granger causes real GDP at 10% level of significance without any feedback effect.

#### 5. Conclusion and recommendations

This study investigates the impact of capital flight on economic growth in Nigeria. Capital flight limits growth potentials, crowds-out investment, and worsens capital formation. The long-run result generated from the ARDL approach, showed that capital flight has a negative effect on economic growth of Nigeria, while the result of the Granger causality test showed a bi-directional causal relationship between capital flight and economic growth. These, thus suggest huge potentials for capital flight reversals in order to enhance economic growth. Efforts must be made toward the design and implementation of appropriate policy measures that would stimulate economic growth and encourage flight capital to return to the country. This study has empirically revealed that capital flight has a negative

#### Impact of Capital Flight on Economic Growth of Nigeria (1980–2014) DOI: http://dx.doi.org/10.5772/intechopen.87836

effect on economic growth of Nigeria. Therefore, we recommend the following measures that will help in curbing issues of capital flight in Nigeria.

Firstly, the study recommends that since a rise in economic growth decreases capital flight, then policies which fuels economic growth should be formulated in order to decrease capital flight. Secondly, since capital flight can be reduced as a result of a high and sustainable economic growth, this necessitates the need to deal with the decay in the critical infrastructure, power, water, transport, etc. This will assist to improve domestic investment and draw foreign investors. Thirdly, foreign loan advances should only be used to finance a project that is self-liquidating or provision of infrastructures. This is based on the belief that the multiplier effect of infrastructure will go a long way in improving the performance of real sectors and generate income. Fourthly, inflows of capital (e.g. foreign direct investment) in the economy should be injected into the right channels necessary for growth such as the real sectors (industrial, agricultural, etc.) where the effect of the inflows can be felt by the economy. In addition, more generally, a new overall strategy, political, and public policies should be made more stable and certain in the country such that investors will be convinced about the effect of these strategies/policies on the actual worth of domestically held property in the future and to give confidence to Nigerians overseas to be back home and invest in their country.

#### Author details

Fatima Muhammad Lawal1 \* and Arzuhan Burcu Gültekin2

1 Department of Economics, Sokoto State University, Sokoto, Nigeria

2 Department of Real Estate Development and Management, Ankara University, Ankara, Turkey

\*Address all correspondence to<EMAIL_ADDRESS>
© 2019 The Author(s). Licensee IntechOpen. This chapteris distributed underthe terms oftheCreative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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[17] Marianna C. The measurement of capital flight and its impact on long term growth: Empirical evidence from crosssection of countries [unpublished M.Sc. thesis]. Bratislava: Comenius University; 2006

[18] Engle RF, Granger CWJ. Cointegration and error correction: Representation, estimating and testing. Econometrica. 1987;55:251-276

Impact of Capital Flight on Economic Growth of Nigeria (1980–2014) DOI: http://dx.doi.org/10.5772/intechopen.87836

[19] Ng'eno NK. Chapter 5. Capital flight in Kenya. In: Ajayi SI, Mohsin SK, editors. External Debt & Capital in sub-Saharan Africa, International Monetary Fund. 2000

[20] Adaramola AO, Obalade AA. Does capital flight have a force to bear on Nigerian economic growth? International Journal of Developing Societies. 2013;2(2):80-86. DOI: 10.116817832422

[21] Otene S, Richard E. Capital flight and Nigerians economy. Journal of Research in National Development. 2012;10(2). ISSN 1596-8308 Available from: www.transcampus.org./journal

[22] Pesaranr MH, Shin Y, Smith RJ. Bounds testing approaches to the analysis of level relationship. Journal of Applied Econometrics. 2001;55:251-276

[23] Nikolaos D. Demand for Money in Hungary: An ARDL Approach. Thessaloniki, Greece: Department of Applied Informatics, University of Macedonia Economics and Social Sciences; 2011

**807**

**Chapter 65**

County

**Abstract**

**1. Introduction**

Sustainable Development after

*Arzuhan Burcu Gültekin, Şefik Taş, Emir Sunguroğlu,*

The strong association between natural disasters and sustainable development was not understood for many years in developing countries including Turkey, and therefore, effective steps have not been taken in terms of improving and strengthening this association. It is obvious that sustainable development works are important after disasters. It was also emphasized that the measures that must be taken to prevent disasters and reduce their losses must be included in development plans of all sizes. Especially, local administration must be trained about being prepared for natural disasters, and the damages must thus be minimized. The sustainability concept must not be limited with a shallow area like the protection and development of the environment. In this chapter, the importance of sustainable development after disasters was emphasized; and the policies that were implemented after the great earthquake that happened in the city of Erbaa in 1939–1942–1943 was examined in

**Keywords:** sustainable development, disaster, natural disaster, Erbaa, earthquake

The United Nations Sustainable Development Goals (Global Goals) constitute a universal call for action to eliminate poverty, protect our planet, and ensure that all people live in peace and welfare. Major disasters interrupt the economy and development targets all over the country, and cause important problems in payment balance, create negative effects on income distribution by disrupting the budget income-expenditure balance, increase poverty, and therefore, stop the planned investments and cut the resources that are allocated for further investments. Similarly, major disasters also cause losses in production and stocks, loss of market, shortages in terms of goods, and increase prices, cause unemployment and disruption in social balances. They also lead to sudden and uncontrolled population movements, which affect sustainable development in a mostly negative way, and even lead to the disruption of political and social integrity. For this reason, it is emphasized in all international institutions and platforms by the United Nations that all the natural disasters in fact pose a problem of development. In addition,

Disasters: The Case of Erbaa

*Aşina Kübra Aslan, Ertuğrul Karagöl,*

the light of the data received from Erbaa Municipality.

*Zekeriya Çelik and Eren Adıgüzel*

#### **Chapter 65**


**2.3. Corporate farming**

Griffiths concluded that the indifference of farmers and their advisors toward the co-operative model could lead to a situation where farmers will have no access to the profits derived from

There can be no doubt that farmers and their co-ops operate in a highly unstable environment (Williamson, 1987). Bijman (2002) raised concerns about co-operative farming and found that many changes in the organisation of agrifood transactions have taken place, that consumers demand high quality products, more variety, and more convenience. Consumers have become concerned about food safety, production conditions, environmental protection, and animal welfare. These changes challenge farmer-owned co-operatives. How do co-operatives deal with the combined innovation in product and marketing? Where does innovation take place: at the level of the member company or at the level of the co-operative? Does the co-operative have the capability to carry out new activities? If so, do members have sufficient knowledge to control the managers executing these new tasks? Can members raise sufficient capital to make the necessary investments in innovation and marketing? Can co-operatives build

sufficient market power vis-à-vis large food processing companies and retailers?

Chaddad and Cook (2002) also raised concern regarding co-operatives. These organisations may be referred to as member-owned, however, when they depend on outsiders for financial support that ownership is lost because the financial contribution of the co-operative member‐ ship is small compared to the non-member contribution. Despite of the one-member, one-vote principle, non-members who are the major suppliers of capital usually determine the main priorities of the co-operative business. Oczkowski (2004) analysed agricultural bargaining cooperatives that negotiate, on behalf of member farmers, with food processors over price and

… the level of prices … depends upon the co-operative's relative bargaining strength. … Given the typical financial, physi‐ cal and human resources of investor-owned firms such as large food processors and the relatively small resources of farmer bargaining co-operatives, it is expected that members would be more impatient (less able to hold-out) in negotiations. Fur‐ ther there is a general expectation that farmers exhibit a relatively greater degree of risk aversion compared to the entrepre‐ neurial focused investor-owned corporate processor. The consequence of a low co-operative's bargaining strength are

In 2006, Oczkowski looked at structural changes necessary for co-operatives to survive: the effects of globalisation on agriculture cannot be ignored. He argued that the restruc‐ turing of the agricultural sector needs substantial amounts of additional capital which will lead to new co-operative forms. These forms would maintain some of the old tradi‐ tions and present viable alternatives to full demutualisation and conversion to the invest‐ ed owned form. Von Pischke and Rouse (2004) provided strategies for mobilising capital in agricultural co-operatives: restructure members' incentives in ways that work con‐ structively (in a commercial sense), and harmonise members' roles as users of the co-op‐

relatively low levels for co-operative objective values, and market and member prices (Oczkowski, 2004, p.16*).*

value-adding to the produce they supply.

280 Environmental Change and Sustainability

quantity for raw agricultural output. He flound that

erative with their role as investors providing the capital.

Corporate farming is another way of looking at the Australian farming industry. It must be mentioned that being part of corporate farming requires more capital than participating in cooperative farming and, looking at our definition of the family farm (i.e. ownership, place of residence, family's contribution to labour, family's responsibility for management, and the family's rural ethos or ideology), the concept may not quite fit. Since corporate farming in Australia is on the increase, it was decided to offer some thoughts on the system.

Corporate farming relates to the modern food industry. It encompasses the farm itself and usually a chain of agriculture-related businesses, including seed supply, agrichemicals, food processing, machinery, storage, transport, distribution, marketing, advertising, and retail sales. According to Tont, Halpin, Collins and Black (2003), corporate farms usually have a diverse group of shareholders/owners, the day-to-day management occurs at the property, but decisions are usually made at the corporation's headquarters. The scale of the properties, in terms of land occupied or in terms of production, tends to be high and there is very often a mixture of foreign and Australian ownership.

Clark (2008) published data on corporate farming in Australia. It generated 24% of agri‐ cultural production (combined revenue A\$9.4 billion), there are 1,806 corporate enterpris‐ es with revenue of more than A\$2 million. The number of corporate farms has increased by 55% between 2001 and 2006; but they represent only 1.5% of all farms. According to Clark (2008), family corporate farms represent 58% of these businesses. Family corporate farms are mainly found in the grain, pastoral and dairy industries; they are robust busi‐ nesses with good succession planning and can withstand production variability. The 42% of corporate-corporates, which are larger than the family-corporates, are dominant enti‐ ties in horticulture, cotton, pigs and poultry. Corporations are generally found in areas where there is ample irrigation water.

Considering the Australian small family farm with an annual income of between A\$5,000 and A\$94,000 (Australian Natural Resources, 2002), it is difficult to imagine how these families can enter the corporate sector as independent entity. Briton (2005) contemplated that "slowly but surely, the farm is being wrenched off the family farmer and integrated more closely into the corporate modus operandi of agri-business" (p. 28). And he quoted Phil Ruthven as saying "it is far better to swap fierce independence for mutual reliance and higher profitability – 40,000 viable farmers are preferable to 112,000 marginal ones" (p. 28). Compared to these attitudes, it is interesting to note that some states in the US have instigated constitutional provisions to counter corporate ownership (Institute for Local Self-Reliance, 2009): nine states place some restriction on corporate-owned farms, and two states have anti-corporate farming restrictions written into their constitutions. Supporters of the anti-corporate farming laws have argued that, in general, agriculture-dependent counties in states with anti-corporate farming laws fare better: they have less family poverty, lower unemployment and higher percentages of farms realising cash gains compared to agriculture dependent counties in states without such laws.

Anti-corporate farming laws do not exist in Australia and there are, as far as could be ascer‐ tained, no comparative Australian studies so far regarding the overall well-being of small farming families in an environment of corporate farming. However, it is assumed that small family farms are disadvantaged when corporate enterprises operate in the same location and within the same line of business.

In the following section, an old system is being reinvented, the commons.


*Edited by Kamal Shah, Bruno Carpentieri and Arshad Ali*

It is well known that the theory of dynamical systems is an essential mathematical tool in the analysis of various real-world processes and phenomena that evolve over time. Different aspects of this rich field of research are evolving all the time, including new theoretical results for qualitative investigation as well as fast numerical techniques for approximate solution. The book provides an overview of the current state of the art in this fascinating and critically important field of pure and applied mathematics, presenting recent developments in theory, modeling, algorithms, and applications.

ISBN 978-1-80356-566-8

Qualitative and Computational Aspects of Dynamical Systems

Published in London, UK © 2023 IntechOpen © AlienCat / CanStockPhoto


**Author details**

Guedri Mkaddem Mounira Laboratory of Energy, Water, Environment and Process, (LR18ES35), National Engineering School of Gabes, University of Gabes, Gabes Tunisia

\*Address all correspondence to<EMAIL_ADDRESS>
© 2023 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

*Essential Oils and Their Bioactive Molecules: Recent Advances and New Applications DOI: http://dx.doi.org/10.5772/intechopen.113406*


**2. Importance of membrane glycoconjugates in providing the functional activity of leukocytes**

Experimental studies have shown that cells of the immune system are exposed to the direct and indirect effects of high blood glucose concentrations in patients with diabetes [4, 5]. Glucose metabolism pathways are activated under conditions of hyperglycemia include the autooxidation of glucose, caused glycation of long-lived proteins; the hexosamine pathway, which leads to the glycosylation of hydroxyl-containing amino acid residues; sorbitol metabolism, accompanied by the formation of free radical; and oxidative phosphorylation leading to mitochondria electron transport chain intensification and the generation of superoxide-anion radicals [12, 13]. Glucose autooxidation and glycation of proteins and lipids leads to an accumulation of advanced oxidation protein products and advanced glycation end products (AGEs), which are difficult to eliminate from the blood and remain in circulation [14]. They are also the source of reactive oxygen species (ROS) since they imitate metal containing oxidation systems. Excessive formation of ROS and reactive nitrogen species (RNS) leads to the development of oxidative-nitrative

#### *The Structure of Leukocyte Sialic Acid-Containing Membrane Glycoconjugates is a Differential… DOI: http://dx.doi.org/10.5772/intechopen.97199*

stress [15]. These changes create a favorable background for the formation of micro- and macrovascular diabetic complications [15, 16].

In condition of hyperglycemia, leukocytes are preactivated by ROS and RNS, angiotensin II, and AGEs. The interaction of AGEs with their receptors, RAGE, causes intracellular signal transduction, which leads to changes in gene expression, overproduction of free radicals, the release of pro-inflammatory molecules (tumor necrosis factor α (TNFα), interleukin 1β (IL-1β), IL-2, IL-6 etc.), and changes in the activity of intracellular enzymes [17].

Glycosyltransferases and glycosidases, which involved in the synthesis of glycans of glycoconjugates, pay much interest among cellular enzymes [18]. In general, mammalian glycans are the product of several types of glycohydrolases and dozens of glycosyltransferases, which act sequentially in the process of oligosaccharide chains synthesis. Each of the glycosyltransferases uses one type of sugar substrate and forms a specific bond between one monosaccharide and a glycan precursor. Thus, the set of glycosyltransferases in the cell determines what type of glycans, among the large number of possible structures, will be formed [19].

The variety of monosaccharides is very large, but most often the carbohydrate components of glycoconjugates of eukaryotic cells include glucose (Glc), N-acetylglucose (GlcNAc), galactose (Gal), N-acetylgalactose (GalNAc), mannose (Man), N-acetylneuraminic acid (Neu5Ac), also known as sialic acid (Sia). Different monosaccharides, combined in a specific sequence by glycosyltransferases, form a glycan, which at one end attaches to a protein or lipid molecule. The formed glycoconjugates are the main macromolecular constituents of biomembranes [19, 20].

The diversity of glycans attached to proteins and lipids makes it possible to form unique glycoconjugates with a wide range of cellular functions. Glycoconjugates play an important role in various biological processes, in particular, glucose homeostasis, protein quality control, cellular differentiation, adhesion, intercellular signaling and inflammation. It is known that carbohydrate residues increase the solubility of glycoproteins, protect against proteolysis, influence on their folding, intracellular transport and secretion. Glycoconjugates are components of the glycocalyx, providing specific interactions with ligands, intercellular contacts and communication. Glycans of glycoconjugate are involved in the formation of the immune response, blood clotting and provide the individuality of organisms and their plasticity [20].

The immune system is highly controlled and fine-tuned by glycosylation, through the addition of a variety of glycans to virtually all adhesion molecules and receptors of leukocytes. Glycoconjugates are implicated in fundamental cellular and molecular processes. Glycans perform function of molecular recognition that regulates both stimulatory and inhibitory immune pathways [21]. The presence of modified carbohydrate determinants in the glycan structure modifies the biological activity of the entire glycoconjugate. The interaction of specific ligand with its modified receptor leads to violations at the level of transmembrane and intracellular signaling [22]. In according to the importance of glycans in the immune system, scientific researches emphasize the essential contributions of glycosylation in the regulation of innate and adaptive immune responses [21]. Therefore, today the scientists (biochemists, molecular biologists, immunologists, pathologists and pharmacologists) are making the great efforts to explore the interrelations of carbohydrate determinants with their glycobiology. Establishing changes in the glycans structure of membrane glycoconjugates of immunocompetent cells makes it possible to understand the mechanism of pathological changes in condition of diabetes and diabetic complications.

#### *Fundamentals of Glycosylation*

Thus, changes in intracellular metabolism, intensification of glycation processes and the development of oxidative-nitrative stress in blood cells under conditions of prolonged hyperglycemia are the main factors that induce pathological changes in the structure of their components and affect their functional state [12, 20].