Saving, investment and capital mobility in African countriesJournal of African Economies (2007)
AbstractRecently developed panel co-integration techniques are applied to data for six African countries to test the Feldstein–Horioka approach to measuring capital mobility. The results suggest three conclusions: savings and investment in panel data are non-stationary series and they are co-integrated; capital was relatively mobile in the African countries during 1970–2000, with estimated savings–retention ratios of 0.73 (FMOLS), 0.45 (DOLS), 0.51 (DOLS with heterogeneity) and 0.39 (DOLS with cross-sectional dependence effects); and there was a marked drop in the savings–retention ratio from 1970–85 to 1986–2000. The results could be interpreted as indicating that capital mobility in African countries has increased, reflecting the implementation of market-orientated reforms, including the privatisation and rationalisation of the public sector, and the partial liberalisation of their exchange rate regimes and financial systems.
- capital mobility,
Citation InformationJohn Thornton and Olumuyiwa S Adedeji. "Saving, investment and capital mobility in African countries" Journal of African Economies Vol. 16 Iss. 3 (2007)
Available at: http://works.bepress.com/john_thornton/7/