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Capital Mobility: An Application of Savings-Investment Link for Tunisia

Author

Listed:
  • Solarin Sakiru Adebola

    (College of Business, Universiti Utara Malaysia, Malaysia)

  • Jauhari Dahalan

    (College of Business, Universiti Utara Malaysia, Malaysia)

Abstract

The paper examines the degree of capital mobility in Tunisia for 1970 to 2009 period, using Feldstein and Horioka (1980) method of savings and investment comovement. We apply ARDL bound test to assess comovement between savings and investment; and to compute the savings retention ratio with FMOLS and DOLS as complements. The results reveal low capital mobility, in contrary to Maminingi (1997) who note perfect capital immobility in Tunisia. Hence, efforts should be made by the concerned authorities to evolve policies that will mobilize international capital into the country.

Suggested Citation

  • Solarin Sakiru Adebola & Jauhari Dahalan, 2012. "Capital Mobility: An Application of Savings-Investment Link for Tunisia," International Journal of Economics and Financial Issues, Econjournals, vol. 2(1), pages 1-11.
    • Handle: RePEc:eco:journ1:2012-01-1
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    References listed on IDEAS

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    Cited by:

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    2. Tekilu Tadesse & Jemal Abafia, 2019. "The causality between Financial Development and Economic Growth in Ethiopia: Supply Leading vs Demand Following Hypothesis," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 3(1), pages 87-115.
    3. Lim Chia Yien & Hussin Abdullah & Muhammad Azam, 2017. "Monetary Policy Inclusive Growth: Empirical Evidence from Malaysia," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(1), pages 225-235, January.
    4. Naib ALAKBAROV & Yılmaz BAYAR, 2021. "International Financial Market Integration and The Feldstein–Horioka Puzzle: Evidence from Emerging Market Economies," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 143-165, December.
    5. Vasudeva N.R. Murthy & Natalya Ketenci, 2021. "The Feldstein–Horioka hypothesis for African countries: Evidence from recent panel error‐correction modelling," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5762-5774, October.
    6. Joe Garmondyu Greaves, 2018. "Investigating Saving and Investment Relationship: Evidence from an Autoregressive Distributed Lag Bounds Testing Approach in Liberia," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 89-104.
    7. Dilem Yıldırım & Ethem Erdem Orman, 2016. "The Feldstein-Horioka Puzzle in the Presence of Structural Breaks: Evidence from China," ERC Working Papers 1601, ERC - Economic Research Center, Middle East Technical University, revised Jan 2016.
    8. Abdul Mansoor & Baserat Sultana & Romana Saeed, 2018. "Analyzing the Savings-Investment Trend in a Panel of G-7 Countries," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 5(2), pages 147-154.

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    More about this item

    Keywords

    Tunisia; Savings Investment; ARDL; Causality;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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