Saving, Investment and Capital Mobility in African Countries-super- 1
Recently 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. Copyright 2007 The author 2006. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: email@example.com, Oxford University Press.
Volume (Year): 16 (2007)
Issue (Month): 3 (June)
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