| Summary: | Purpose: The purpose of this paper is twofold. First, the study aims to examine the direct effect of illicit financial flows (IFF) and quality of governance (QoG) on economic growth. Second, this study seeks to examine the moderating effect of QoG on the economic consequences of IFF. Design/methodology/approach: This study collected data from nine The Association of Southeast Asian Nations (ASEAN) countries for the period of 10 years from 2008 to 2019. The study concerned an analysis of the testing of a conceptual framework which based on secondary data which may lack a comprehensive substantiation on the grounds of measurement theory. A partial least squares (PLS) modelling using the SmartPLS 3.2.8 version was used as a statistical tool to examine the measurement and structural model. Findings: Key findings provide empirical support on the effect of IFF and QoG on economic growth. It also confirmed that QoG significantly moderated the relationship between IFF and economic growth by reducing the negative impact of IFF on economic growth. Practical implications: Immediate corrective action needs to be implemented by policymakers of ASEAN countries to strengthen QoG to effectively curb IFF activities. Originality/value: This study provides current empirical evidence on the relationship of IFF, QoG and economic growth within ASEAN countries. © 2021, Emerald Publishing Limited.
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