Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The magnitude and consequences of money laundering

The magnitude and consequences of money laundering This study aims to estimate the amount of money laundering (ML) with multiple proxy approaches and measure the effects of ML on various indicators of the economic and financial sectors. Theoretical justifications are recruited from the parasite theory of organised crime.Design/methodology/approachA quantitative research methodology was used on a balanced panel data set to test the study’s hypothesis through generalised method of moment (GMM). The study sample consisted of 77 countries, and the data was collected for 15 years (2005–2019).FindingsA study has found that 1.23% of global gross domestic product is laundered yearly, and there is no noticeable decline in ML activities. Further study has also found that ML has devastating effects on countries, government revenue, foreign investment, economic development, political and peace conditions, bank liquidity, interest rate volatility and exchange rate volatility. The study has not witnessed the negative consequence of ML on countries’ inflation rates.Practical implicationsEstimates of the study guide policymakers about the volume of resources fleeing and helps them to decide the level of response needed. Further findings help them prioritise the response system according to the area most affected.Originality/valueThis study is an original contribution by the authors and has studied the effects of ML by computing the amount of ML by four different proxies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Money Laundering Control Emerald Publishing

The magnitude and consequences of money laundering

Download PDF
17 pages

Loading next page...
 
/lp/emerald-publishing/the-magnitude-and-consequences-of-money-laundering-KpsAi2rNkx

References (15)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1368-5201
eISSN
1368-5201
DOI
10.1108/jmlc-09-2022-0139
Publisher site
See Article on Publisher Site

Abstract

This study aims to estimate the amount of money laundering (ML) with multiple proxy approaches and measure the effects of ML on various indicators of the economic and financial sectors. Theoretical justifications are recruited from the parasite theory of organised crime.Design/methodology/approachA quantitative research methodology was used on a balanced panel data set to test the study’s hypothesis through generalised method of moment (GMM). The study sample consisted of 77 countries, and the data was collected for 15 years (2005–2019).FindingsA study has found that 1.23% of global gross domestic product is laundered yearly, and there is no noticeable decline in ML activities. Further study has also found that ML has devastating effects on countries, government revenue, foreign investment, economic development, political and peace conditions, bank liquidity, interest rate volatility and exchange rate volatility. The study has not witnessed the negative consequence of ML on countries’ inflation rates.Practical implicationsEstimates of the study guide policymakers about the volume of resources fleeing and helps them to decide the level of response needed. Further findings help them prioritise the response system according to the area most affected.Originality/valueThis study is an original contribution by the authors and has studied the effects of ML by computing the amount of ML by four different proxies.

Journal

Journal of Money Laundering Control – Emerald Publishing

Published: Aug 14, 2024

Keywords: Money laundering (ML); Multiple proxy; Consequences of ML; GMM (generalised method of moment)

There are no references for this article.