Capital Intensity Effects on International Capital Flows and Current Account of Association of Southeast Asian Nations + 6 Countries

Ni Putu Wiwin Setyari, I. Nengah Kartika, I. Wayan Wenegama, Ni Putu Martini Dewi and I. Ketut Sudiana
Additional contact information
I. Nengah Kartika: Faculty of Economics and Business, Udayana University, Jalan Sudirman, Denpasar, Bali, Indonesia,
I. Wayan Wenegama: Faculty of Economics and Business, Udayana University, Jalan Sudirman, Denpasar, Bali, Indonesia,
Ni Putu Martini Dewi: Faculty of Economics and Business, Udayana University, Jalan Sudirman, Denpasar, Bali, Indonesia,
I. Ketut Sudiana: Faculty of Economics and Business, Udayana University, Jalan Sudirman, Denpasar, Bali, Indonesia.

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 3, 135-144

Abstract: One of the results of the theory of comparative advantage Heckscher-Ohlin-Mundell is the substitution relationship between trades and international capitals. This is due to the absence of incentives for capital to move if a trade has been opened. This paper attempts to examine the effect of a country's comparative advantage on international capital flows which are reflected in changes in its current account balance. The development of a new theory predicts that a country with high capital intensity will receive larger international capital flows than other countries with lower capital intensity. Using panel data from the member of Association of Southeast Asian Nations + 6 countries estimation results indicate an increase in capital inflows when a country has relatively higher capital intensity and encourage larger current account deficit. The analysis was applied to dynamic panel models with attention to heterogeneity and endogeneity problems that arise in the use of panel data.

Keywords: International Capital Flows; Current Account Adjustment; Open Economy Macroeconomics; Macroeconomic Impacts of Globalization (search for similar items in EconPapers)
JEL-codes: F21 F32 F62 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.econjournals.com/index.php/ijefi/article/download/4507/pdf (application/pdf)
http://www.econjournals.com/index.php/ijefi/article/view/4507/pdf (text/html)

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:eco:journ1:2017-03-19

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().