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Savings investment correlations and capital mobility in developing countries

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  • Mamingi, Nlandu

Abstract

The author estimates savings and investment correlations for 58 developing countries to assess the capital mobility (in the Feldstein-Horioka sense) in these countries. Using a new estimation technique (fully modified ordinary least squares) - which simultaneously corrects for serial correlation, endogeneity, and sample bias (asymptotically) - the author finds that many developing countries are financially integrated in the long run. More important, the estimates from this robust estimation technique indicate that savings-investment correlations are lower for middle-income than for lower-income countries. The author also provides evidence of capital mobility for several of these countries in the short run.

Suggested Citation

  • Mamingi, Nlandu, 1993. "Savings investment correlations and capital mobility in developing countries," Policy Research Working Paper Series 1211, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1211
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    References listed on IDEAS

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    1. Montiel, Peter J, 1994. "Capital Mobility in Developing Countries: Some Measurement Issues and Empirical Estimates," The World Bank Economic Review, World Bank, vol. 8(3), pages 311-350, September.
    2. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
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    10. Tamim Bayoumi, 1990. "Saving-Investment Correlations: Immobile Capital, Government Policy, or Endogenous Behavior?," IMF Staff Papers, Palgrave Macmillan, vol. 37(2), pages 360-387, June.
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    Cited by:

    1. Mehmet MERCAN, 2014. "Feldstein-Horioka Hipotezinin AB-15 ve Turkiye Ekonomisi icin Sinanmasi: Yatay Kesit Bagimliligi Altinda Yapisal Kirilmali Dinamik Panel Veri Analizi," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 14(2), pages 231-245.
    2. Huseyin Kalyoncu, 2007. "Saving-investment correlations and capital mobility in OECD countries: an error correction analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 14(8), pages 597-601.
    3. Mamingi, Nlandu, 1997. "Saving-investment correlations and capital mobility: The experience of developing countries," Journal of Policy Modeling, Elsevier, vol. 19(6), pages 605-626, December.

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