Role of foreign direct investment in estimating capital mobility: a reappraisal of Feldstein-Horioka puzzle
AbstractAs investment by nonresidents is not subject to inter-temporal budget constraint of the recipient country, it may not belong to Feldstein-Horioka equation. This article finds that capital mobility is remarkably high in both developed and developing countries when Foreign Direct Investment (FDI) is excluded from domestic investment. Moreover, economic openness and financial markets' liberalization are also found to have increased the degree of capital mobility.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 18 (2011)
Issue (Month): 12 ()
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- Henrik Egbert & Nadeem Naqvi, 2011.
"Market-dependent Production Set,"
MAGKS Papers on Economics
201145, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
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