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Type :Thesis
Subject :HG Finance
Main Author :Ghuloom, Aljasmi Maryam Abbas Mohammad
Title :A quantitative analysis of the magnitude of money laundering activities and its determinants in the United Arab Emirates
Hits :8
Place of Production :Tanjong Malim
Publisher :Fakulti Pengurusan dan Ekonomi
Year of Publication :2024
Corporate Name :Perpustakaan Tuanku Bainun
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Abstract : Perpustakaan Tuanku Bainun
The United Arab Emirates (UAE) has one of the most developed financial sectors in the world. However, it is one of the top destinations for illicit funds and a safe haven for laundered money. This study aims to assess the magnitude and determinants of money laundering (ML) in the UAE from 1975 to 2020. The research is hinged on Masciandaro_s ML model. Using the autoregressive distributed lag (ARDL) modelbased currency demand function (CDA), the findings indicate that the average size of ML as a percentage of GDP was about 19.034 percent during this period, fluctuating between 15.129 percent and 23.121 percent. Besides, the results confirm that the key factors influencing ML in the UAE include the real estate market, money outflows, arms procurement, the size of the underground economy, gold trade, financial development, and national output. In addition, the results illustrate the presence of a significant nonlinear relationship between ML and economic growth. Also, the results demonstrate a _U-shaped_ Kuznets curve, or FD-ML-KC (financial development-ML Kuznets curve), with an increase in the magnitude of ML impairing financial development at the initial stage up to a peak point (of about 18.19 percent), after which further increases in the magnitude of ML promote financial development. Moreover, the results of the Toda- Yamamoto causality procedure indicate the presence of a two-way causal relationship between ML and the real estate market (and underground economy), a unidirectional causality from ML to the outflow of money (and financial development, output size), and also from gold trade (and arms imports) to ML. The study's policy implications suggest that the UAE's government should implement policies to deter the laundering of illicit funds through the real estate market, gold trade, remittance systems, and financial institutions to safeguard the economy from external shocks and ensure the integrity of the financial sector.

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