International Journal of Management, Accounting and Economics
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Volume 2, No. 6, June 2015 Pages: 517 - 526
Investigating Capital Mobility and Saving- Investment Relationship: Case Study of MENA Countries
Mansoor Mahini Zadeh , Elahe Mahmoodi , Majid Mahmoodi
Corresponding author:
m[dot]n[at]stu[dot]yazd[dot]ac[dot]ir
Abstract:
This paper determines the degree of capital mobility and saving- investment association by using the Feldstein- Horioka (1980) approach among Middle East and North African (MENA) countries during 1990-2011. According to the Feldstein- Horioka hypothesis, in a country with high degree of capital mobility there should be no relationship between domestic saving and domestic investment and inversely, in a country with low degree of capital mobility there is a high correlation between domestic saving and domestic investment. Using panel data and employing Random effect Model to estimate the model, the obtained results show that capital is highly mobile in these countries.
Keywords:
Capital mobility, Feldestein and Horioka approach, MENA region, Panel Data
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