International Capital Mobility: The Case of Developing Countries

Emmanuel Anoruo

The IUP Journal of Applied Economics, 2005, vol. IV, issue 5, 7-18

Abstract: This paper uses the method of dynamic OLS (DOLS) in conjunction with cointegration procedure to examine the degree of international capital mobility for 25 developing countries. Specifically, three analyses are undertaken. First, the time series properties of domestic saving and investment are ascertained with the help of the modified Dickey-Fuller (DF-GLS) methodology. Second, the long-run equilibrium relationship between domestic saving and investment is explored by using the two-step cointegration test proposed by Engle and Granger (1987). Third, the Wald chi-square (c2) test is employed to examine the unity correlation between the two variables. The DF-GLS unit root test indicates that domestic saving and investment are integrated of order one [I(1)]. The Wald test rejects the hypothesis of perfect capital mobility for 21 out of the 25 countries. The cointegration results suggest that for most of the sample countries, domestic saving and investment do not share long-run equilibrium association, which constitutes evidence in favor of international capital mobility.

Date: 2005
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjae:v:04:y:2005:i:5:p:7-18

Access Statistics for this article

More articles in The IUP Journal of Applied Economics from IUP Publications
Bibliographic data for series maintained by G R K Murty ().