INTRA ASEAN-5 CAPITAL FLOWS: DO THEY REPRESENT NEOCLASSICAL BELIEF OR LUCAS PARADOX?

Nurul Qolbi () and Akhmad Syakir Kurnia ()
Additional contact information
Nurul Qolbi: Diponegoro University
Akhmad Syakir Kurnia: Diponegoro University

Bulletin of Monetary Economics and Banking, 2015, vol. 18, issue 2, 157-182

Abstract: In the neoclassical belief, capital flows downhill from rich to poor countries as a consequence of capital endowment variation. In contrast to the neoclassical belief, Lucas found evidence that capital tends to flow uphill. This paper investigates the intra ASEAN-5 capital flows. Using panel estimation, we found that marginal product of capital, human capital, total factor productivity growth, and the quality of institutions appear as determinants for the capital flow from Indonesia, Malaysia, Philippines, and Thailand to Singapore as a host country. On the contrary, the capital flow from Singapore to other ASEAN countries as host countries is encouraged only by the quality of institutions, human capital as well as per capita GDP. The result shows that Lucas variables emerge as determinants for the uphill and downhill capital flow in ASEAN-5. In the meantime, marginal product of capital that represents neoclassical variable appears as the determinant for uphill capital flow from other ASEAN countries to Singapore. This gives significant insight that Lucas variables emerge as companion to the neoclassical variables in explaining intra ASEAN capital flow.

Keywords: Capital Flow; Neoclassical Belief; Lucas Paradox; Panel Data Model (search for similar items in EconPapers)
JEL-codes: F21 O16 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1181&context=bmeb (application/pdf)

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:idn:journl:v:18:y:2015:i:2b:p:157-182

DOI: 10.21098/bemp.v18i2.521

Access Statistics for this article

Bulletin of Monetary Economics and Banking is currently edited by Paresh Narayan

More articles in Bulletin of Monetary Economics and Banking from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().