The Saving-Investment Correlation and Capital Mobility in Asia

This study assesses financial integration and international capital mobility in the Asian region by adopting the Feldstein-Horioka criterion based on the relationship between saving and investment. The analysis is carried out in two stages. The initial part of the analysis follows the standard pr...

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Main Author:	Kumari, Sarinder
Format:	Thesis
Language:	English English
Published:	2004
Subjects:	Saving and investment - Asia
Online Access:	http://psasir.upm.edu.my/id/eprint/6044/1/FEP_2004_1.pdf
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id	my-upm-ir.6044
record_format	uketd_dc
spelling	my-upm-ir.60442023-01-05T03:53:24Z The Saving-Investment Correlation and Capital Mobility in Asia 2004-05 Kumari, Sarinder This study assesses financial integration and international capital mobility in the Asian region by adopting the Feldstein-Horioka criterion based on the relationship between saving and investment. The analysis is carried out in two stages. The initial part of the analysis follows the standard procedure by analysing the saving retention coefficient. Using the standard time-averaged cross-sectional regression model originally employed by Feldstein and Horioka as a benchmark, a number of alternative estimation regression models are employed in this study. Of particular reference is the panel regression model proposed by Kao and Chiang (1 999) emphasized in this study. Panel unit root and panel cointegration tests that have been shown to have higher testing power are used to analyse the data. The second part of the study introduces an innovation by tracking the changes in the parameters over time to obtain evidence on whether capital mobility and financial market integration have increased over time. The empirical analysis covers 20 Asian countries at different stages of financial and economic development over the period from 1980 to 1999. The sample countries are also divided into four sub-regional samples so as to enable a comparative view of regional differences in capital mobility. The findings indicate that the close association between saving and investment is a robust empirical regularity and is consistent with other studies reported in the literature. The results of the different estimation methods including the panel regression models, confirm that the saving retention coefficient is statistically and significantly different from zero. This shows that the Asian region as a whole rejects the notion of perfect capital mobility over the sample period. Generally capital mobility is low in the Asian countries although there has been a gradual increase in capital mobility over time as shown by the changes in the saving retention coefficients. However there are regional differences with the ASEAN 5 region including Japan and Korea showing relatively higher capital mobility than the other regions. Saving and investment - Asia 2004-05 Thesis http://psasir.upm.edu.my/id/eprint/6044/ http://psasir.upm.edu.my/id/eprint/6044/1/FEP_2004_1.pdf text en public phd doctoral Universiti Putra Malaysia Saving and investment - Asia Faculty Economics and Management English
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English English
topic	Saving and investment - Asia
spellingShingle	Saving and investment - Asia Kumari, Sarinder The Saving-Investment Correlation and Capital Mobility in Asia
description	This study assesses financial integration and international capital mobility in the Asian region by adopting the Feldstein-Horioka criterion based on the relationship between saving and investment. The analysis is carried out in two stages. The initial part of the analysis follows the standard procedure by analysing the saving retention coefficient. Using the standard time-averaged cross-sectional regression model originally employed by Feldstein and Horioka as a benchmark, a number of alternative estimation regression models are employed in this study. Of particular reference is the panel regression model proposed by Kao and Chiang (1 999) emphasized in this study. Panel unit root and panel cointegration tests that have been shown to have higher testing power are used to analyse the data. The second part of the study introduces an innovation by tracking the changes in the parameters over time to obtain evidence on whether capital mobility and financial market integration have increased over time. The empirical analysis covers 20 Asian countries at different stages of financial and economic development over the period from 1980 to 1999. The sample countries are also divided into four sub-regional samples so as to enable a comparative view of regional differences in capital mobility. The findings indicate that the close association between saving and investment is a robust empirical regularity and is consistent with other studies reported in the literature. The results of the different estimation methods including the panel regression models, confirm that the saving retention coefficient is statistically and significantly different from zero. This shows that the Asian region as a whole rejects the notion of perfect capital mobility over the sample period. Generally capital mobility is low in the Asian countries although there has been a gradual increase in capital mobility over time as shown by the changes in the saving retention coefficients. However there are regional differences with the ASEAN 5 region including Japan and Korea showing relatively higher capital mobility than the other regions.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Kumari, Sarinder
author_facet	Kumari, Sarinder
author_sort	Kumari, Sarinder
title	The Saving-Investment Correlation and Capital Mobility in Asia
title_short	The Saving-Investment Correlation and Capital Mobility in Asia
title_full	The Saving-Investment Correlation and Capital Mobility in Asia
title_fullStr	The Saving-Investment Correlation and Capital Mobility in Asia
title_full_unstemmed	The Saving-Investment Correlation and Capital Mobility in Asia
title_sort	saving-investment correlation and capital mobility in asia
granting_institution	Universiti Putra Malaysia
granting_department	Faculty Economics and Management
publishDate	2004
url	http://psasir.upm.edu.my/id/eprint/6044/1/FEP_2004_1.pdf
_version_	1776100253146021888

The Saving-Investment Correlation and Capital Mobility in Asia

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