An Exploratory Inquiry of the Feldstein-Horioka Puzzle in Selected Southeast Asian Countries

Journal of Transnational Management, 2009, Vol. 14, Issue 4, pp. 259-276

Posted: 30 Jun 2012 Last revised: 1 Oct 2012

See all articles by Komain Jiranyakul

Komain Jiranyakul

National Institute of Development Administration

Tantatape Brahmasrene

Purdue University North Central

Date Written: 2009

Abstract

This study reexamines the Feldstein-Horioka puzzle in selected Southeast Asian countries: Indonesia, the Philippines, and Thailand. The long-run equilibrium is estimated using the bounds testing procedure by Pesaran, Shin, and Smith (2001) while the causal relationship between savings and investment utilizes Granger non-causality test of Toda and Yamamoto (1995). The estimators from these two procedures do not seem to support a positive correlation between savings and investment in these three countries as found by Feldstein and Horioka (1980).

Keywords: capital mobility, causality, cointegration, investment and savings, the Feldstein-Horioka puzzle

JEL Classification: E21, E22

Suggested Citation

Jiranyakul, Komain and Brahmasrene, Tantatape, An Exploratory Inquiry of the Feldstein-Horioka Puzzle in Selected Southeast Asian Countries (2009). Journal of Transnational Management, 2009, Vol. 14, Issue 4, pp. 259-276, Available at SSRN: https://ssrn.com/abstract=2096756

Komain Jiranyakul (Contact Author)

National Institute of Development Administration ( email )

118 Seri Thai Road
Bangkok, 10240
Thailand

Tantatape Brahmasrene

Purdue University North Central ( email )

1401 South US 421
Westville, IN 46391
United States

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