Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach
This paper reexamines the status of international capital mobility under the Feldstein-Horioka (1980) hypothesis by comparing the results from the OECD and non-OECD high income categories. Data on savings and investment ratios of 21 OECD and 17 non-OECD countries were analyzed using the dynamic hete...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Kaunas University of Technology
2014
|
| Online Access: | http://psasir.upm.edu.my/id/eprint/37660/ http://psasir.upm.edu.my/id/eprint/37660/1/Feldstein-Horioka%20puzzle%20and%20international%20capital%20mobility%20in%20high%20income%20countries%20a%20pool%20mean%20group%20approach.pdf |
| _version_ | 1848848667743617024 |
|---|---|
| author | Hassan, Ibrahim Bakari Mohamed, Azali Lee, Chin |
| author_facet | Hassan, Ibrahim Bakari Mohamed, Azali Lee, Chin |
| author_sort | Hassan, Ibrahim Bakari |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper reexamines the status of international capital mobility under the Feldstein-Horioka (1980) hypothesis by comparing the results from the OECD and non-OECD high income categories. Data on savings and investment ratios of 21 OECD and 17 non-OECD countries were analyzed using the dynamic heterogeneous panel estimators of Pooled Mean Group (PMG), Mean Group (MG) and Dynamic Fixed Effects (DFE). Based on the series of Hausman post-estimation test, result from the PMG is upheld. The saving-retention coefficient, showing the level of international capital mobility, reads 0.89, 0.93 and 0.16 for the high-income group, OECD category and non-OECD category respectively. This suggests lower capital mobility in high-income as a whole and OECD countries, and higher capital mobility in the non-OECD countries. The contradictory findings confirmed that the Feldstein-Horioka saving-retention coefficient is unlikely, a viable option of measuring cross-border capital mobility. Further researches therefore need to re-observe the qualification of saving-retention coefficient in explaining international capital mobility. |
| first_indexed | 2025-11-15T09:38:09Z |
| format | Article |
| id | upm-37660 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T09:38:09Z |
| publishDate | 2014 |
| publisher | Kaunas University of Technology |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-376602015-12-18T01:57:09Z http://psasir.upm.edu.my/id/eprint/37660/ Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach Hassan, Ibrahim Bakari Mohamed, Azali Lee, Chin This paper reexamines the status of international capital mobility under the Feldstein-Horioka (1980) hypothesis by comparing the results from the OECD and non-OECD high income categories. Data on savings and investment ratios of 21 OECD and 17 non-OECD countries were analyzed using the dynamic heterogeneous panel estimators of Pooled Mean Group (PMG), Mean Group (MG) and Dynamic Fixed Effects (DFE). Based on the series of Hausman post-estimation test, result from the PMG is upheld. The saving-retention coefficient, showing the level of international capital mobility, reads 0.89, 0.93 and 0.16 for the high-income group, OECD category and non-OECD category respectively. This suggests lower capital mobility in high-income as a whole and OECD countries, and higher capital mobility in the non-OECD countries. The contradictory findings confirmed that the Feldstein-Horioka saving-retention coefficient is unlikely, a viable option of measuring cross-border capital mobility. Further researches therefore need to re-observe the qualification of saving-retention coefficient in explaining international capital mobility. Kaunas University of Technology 2014 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/37660/1/Feldstein-Horioka%20puzzle%20and%20international%20capital%20mobility%20in%20high%20income%20countries%20a%20pool%20mean%20group%20approach.pdf Hassan, Ibrahim Bakari and Mohamed, Azali and Lee, Chin (2014) Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach. Engineering Economics, 25 (5). pp. 480-486. ISSN 1392-2785; ESSN: 2029-5839 http://www.inzeko.ktu.lt/index.php/EE/article/view/3539 10.5755/j01.ee.25.5.3539 |
| spellingShingle | Hassan, Ibrahim Bakari Mohamed, Azali Lee, Chin Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| title | Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| title_full | Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| title_fullStr | Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| title_full_unstemmed | Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| title_short | Feldstein-Horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| title_sort | feldstein-horioka puzzle and international capital mobility in high income countries: a pool mean group approach |
| url | http://psasir.upm.edu.my/id/eprint/37660/ http://psasir.upm.edu.my/id/eprint/37660/ http://psasir.upm.edu.my/id/eprint/37660/ http://psasir.upm.edu.my/id/eprint/37660/1/Feldstein-Horioka%20puzzle%20and%20international%20capital%20mobility%20in%20high%20income%20countries%20a%20pool%20mean%20group%20approach.pdf |