Abstract:
This paper investigates the Feldstein-Horioka coefficients and evaluates the
degree of international capital mobility for ten newly industrialized countries
(NICs) over the different sub-periods from 1970 to 2010. By applying the Pedroni and Westerlund cointegration tests, we find that saving and investment are
indeed cointegrated. The estimated FH coefficients using FMOLS and DOLS are
0.24 and 0.33, respectively, for the period 1970–1980. Furthermore, the estimated FH coefficients reduce from 0.80 (FMOLS) in 1991–2000 to 0.36
(FMOLS) in 1970–1980. The small FH coefficients suggest that international
capital mobility increased in the NICs during the sub-periods 1970–1980 and
2001–2010.
