Trade Misreporting and Capital Flight: A Study of Bangladesh with Major OECD Export Partner Countries

Abstract

Present study seeks to determine the quantitative measurement of unrecorded transaction through misreporting of trade. We want to find out the determinants of informal transaction and the relationship between hidden capital outflow and inflow. Another attention is to identify the hidden capital and its share in GDP as well as total trade of Bangladesh with individual partner countries. Also, the measurement of capital flight through the difference between actual & official balance of trade. In our study here we have taken 3 major or largest OECD export partner countries of Bangladesh according to their average percentage share of world export. Three largest export OECD partner countries are USA, Germany and UK. Now to measure the export and import misreporting we have taken the difference between actual and official data of Bangladesh where we have considered partner countries import from Bangladesh is the actual export of Bangladesh and partner countries export to Bangladesh is the actual import of Bangladesh.