Modeling Capital Flight in Iran's Economy

Subject Areas : Economic Development, Innovation, Technological Change, and Growth

Hojatallah Mirzaei ¹ , Mirhossein Mosavi ² , Javad Taherpour ³ , Hossein Yadollahi ⁴

1 - Assistant Professor , Faculty of Economics, Allameh Tabatabaei University, Tehran, Iran, (Corresponding Authur), [e-mail]
2 - Associate Professor, Department of of Economics, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran, [e-mail]
3 - Associate Professor , Faculty of Economics, Allameh Tabatabaei University, Tehran, Iran, [e-mail]
4 - Ph.D. candidate, Faculty of Economics, Allameh Tabatabaei University, Tehran, Iran, [e-mail]

Received: 2024-10-18 Accepted : 2025-04-18 Published : 2025-05-17

Keywords: Capital Flight, Political Stability, Bayesian Models Averaging, Sanction GEL Classification: C02, G11, G03,

Abstract :

The article aims to model capital flight in the Iranian economy, considering the specific conditions of the country, during the period 1990-2022. To achieve this goal, 36 variables affecting capital flight were entered into Bayesian averaging models. To achieve this goal, 36 variables affecting capital flight were entered into Bayesian averaging models. Therefore, based on the BMA model, 11 non-fragile variables affecting capital flight were identified. Based on the results, the variables of sanctions, foreign debt, and economic governance had the highest impact on capital flight in the Iranian economy. Finally, the results indicated that political and international variables have a greater impact on capital flight in the Iranian economy than economic variables. Based on the results, it can be stated that capital flight has a multidimensional nature; to reduce it, a systemic perspective (multidimensional perspective) must replace the traditional perspective (single-dimensional perspective). It should be noted that, given the priority of factors affecting capital flight in the present study, policies of political stability and improvement of diplomatic relations at the global level should be prioritized.

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