Capital flight refers to the movement of corporate monies from one investment to another, generally less costly one.
Capital flight is the widespread evacuation of financial resources and money from a country as a result of factors like political or economic unrest, currency depreciation, or the implementation of capital controls. Capital flight can be either legal—as when international investors return funds to their home nations—or illegal—as when countries impose capital controls that prevent the export of assets.
Poorer countries can suffer greatly as a result of capital flight because it hinders economic progress and may degrade living conditions. Contrary to popular belief, open economies are less susceptible to capital flight because investors are more confident in their long-term prospects as a result of transparency and openness.
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