Q. Explain about Capital Flight?

Capital Flight: A destructive process in that investors (both domestic residents and foreigners) withdraw their financial capital from a country as a result of what are perceived to be non-favourable changes in political conditions, economic policies or other factors. Consequences of capital flight can include a contraction in real investment spending, a dramatic depreciation in exchange rate and a rapid tightening of credit conditions. Developing countries are most vulnerable to capital flight.