Saving-investment correlations and the financial globalization of the BRICS countries

Tarlok Singh

Applied Economics, 2022, vol. 54, issue 20, 2257-2274

Abstract: This study examines the long-run relationship between domestic saving and investment, and assesses the financial globalization of the BRICS economies. The model estimated in one-regime setting with no structural break and in sample-split setting with single as well as multiple structural breaks provides dominant support for the presence of long-run relationship between domestic saving and investment. The slope parameter of saving and implied home-bias in the asset portfolios of investors is generally small to medium for Brazil and large for Russia, India, China, and South Africa (RICS). The small to medium slope coefficient of saving for Brazil suggests the presence of moderate to high international mobility of capital. Financial markets are characterized by financial frictions and there is imperfect integration of RICS with the global financial markets. While the slope coefficient of saving is numerically large for RICS and small to medium for Brazil, it is not strictly identical across estimators. This finding can be generalized to mimic the findings of the extant literature. The academic debates and economic controversies – which surface in almost every area of empirical research – could be ascribed, inter alia, to the use of different methodologies and test statistics across studies.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2021.1912280 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:54:y:2022:i:20:p:2257-2274

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2021.1912280

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().