Analysis of Interaction and Prioritization of Economic Determinants of Capital Flight from Iran

This study is carried out to identify, evaluate and rank the causes and factors of capital flight in Iran, derived from ideas of a group of experts in the capital and investment field, including managers, scholars, and other elites. The present research is applied in terms of purpose and duration of data collection, considered a descriptive-survey. After reviewing the literature, a set of ten economic causes for the capital flight were identified. After the collected data's fuzzy expression, its de-fuzzy numbers are considered the DEMATEL matrix's direct effect. Using this technique, the indirect effects matrix and total effects were calculated. To evaluate each factor's position, based on Interpretation Structural Modeling (ISM), the MICMAC chart was derived, and the results indicated that none of the elements were recognized as dependent variables. Among these, "problems of transferring funds and opening an account in the international framework" and "the dual exchange rate system in the country" are independent variables with low dependence but high penetration. Two autonomous elements and the six linkages are also identified. Finally, through Analytical Network Process (ANP) method, all economic causes of the country's capital flight were ranked. The results show that the highest priority of capital flight in Iran is "low investment return in Iran, and on the contrary, high-profit incentives for investment," "high financial and economic risks, inappropriate risk hedging," "Fundraising obstacles (including fixed interest rates, quotations, failure to provide allocated financial credits)," "problems to establish ideas and business plans, and complex processes of setting up a business" and "low degree of economic openness and problems to export and import" respectively. Finally, strategies to address the capital flight were addressed, including creating a secure and stable economic space and adopting valid macroeconomic policies with appropriate interest rates.