scholarly journals 50 Years of Capital Mobility in the Eurozone: Breaking the Feldstein-Horioka Puzzle

2021 ◽  
Author(s):  
Mariam Camarero ◽  
Alejandro Muñoz ◽  
Cecilio Tamarit
Keyword(s):  
Capital Mobility ◽  
Financial Assistance ◽  
German Reunification ◽  
Domestic Investment ◽  
Assistance Program ◽  
Substantial Impact ◽  
Exchange Rate Mechanism ◽  
Long Run ◽  
The Impact ◽  
Rate Mechanism

AbstractThis paper assesses capital mobility for the Eurozone countries by studying the long-run relationship between domestic investment and savings for the period 1970-2019. Our main goal is to analyze the impact of economic events on capital mobility during this period. We apply the cointegration methodology in a setting that allows us to identify endogenous breaks in the long-run saving-investment relationship. Precisely, the breaks coincide with relevant economic events. We find a downward trend in the saving-investment retention since the 70s for the so-called “core countries”, whereas this trend is not so evident in the peripheral, where the financial and sovereign crises have had a more substantial impact. In addition, our analysis captures other economic events: the Exchange Rate Mechanism (ERM) crisis, the German reunification, the European financial assistance program, and the post-crisis period. Our results also indicate that the original euro design had some flaws that remain unsolved.

scholarly journals Tax revenue and private domestic investment

2019 ◽  
Vol 1 (2) ◽  
pp. 25-32
Author(s):  
Richard Umeokwobi ◽  
Emeka Nkoro
Keyword(s):  
Ordinary Least Squares ◽  
Tax Revenue ◽  
Domestic Investment ◽  
Secondary Sources ◽  
Used Oil ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Oil Revenue ◽  
Long Run ◽  
The Impact

This paper investigated the impact of tax revenue on private domestic investment in Nigeria from 1980 to 2018 using the modified ordinary least squares- Autoregressive distributed lag (ARDL). The paper used oil revenue, non-oil revenue, and Corporate Income Tax (CIT) as the independent variables while Private Domestic Investment (PDI) is the dependent variable. Oil revenue and non-oil revenue were used as a proxy for oil and non-oil tax. These data were obtained from secondary sources- central Bank of Nigeria, World Bank database and Federal Inland Revenue service statistical bulletin. The result showed that a long-run relationship exists between the aforementioned variables. Also, the paper revealed that oil and non-oil do not have a significant impact on PDI but CIT has a positive and significant impact on PDI. The paper recommends that proper measures/reforms should be put in place in order to reduce the impact of tax on private domestic investment in Nigeria.

scholarly journals An Investigation Into The Demand For Broad Money In South Africa

2014 ◽  
Vol 13 (6) ◽  
pp. 1419
Author(s):  
Moreblessing Simawu ◽  
Courage Mlambo ◽  
Genius Murwirapachena
Keyword(s):  
South Africa ◽  
Money Demand ◽  
Capital Mobility ◽  
Vital Role ◽  
Correction Model ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
Implementation Of Monetary Policy ◽  
The Impact

A stable money demand function plays a vital role in the planning and implementation of monetary policy. With the use of Johansen co-integration and error correction model estimates, this study examines the existence of a stable long-run relationship between real broad money demand ( RM3) and its explanatory variables in South Africa for the period 1990-2009. In contrast to previous analyses, this study augments the co-integration and vector autoregression (VAR) analysis with impulse response and variance decomposition analyses to provide robust long-run effects and short-run dynamic effects on the real money demand. In addition, this study introduces a foreign interest rate to capture the impact of capital mobility on money demand in South Africa. Results from the Johansen test suggest that real broad money demand (RM3) and its all explanatory variables are cointegrated.

scholarly journals An econometric analysis of the impact of democratisation on domestic savings and investment in Nigeria

2014 ◽  
Vol 9 (4) ◽  
pp. 478-497
Author(s):  
G Dinneya
Keyword(s):  
Economic Growth ◽  
Econometric Analysis ◽  
Domestic Investment ◽  
Empirical Relationships ◽  
Economic Variables ◽  
Long Run ◽  
Composite Indices ◽  
Domestic Savings ◽  
Short Run ◽  
The Impact

This study employs four-dimensional and one composite indices of democratization constructed to capture the democratization processes in Nigeria’s transition polity, to investigate the empirical relationships between the levels of democratization in Nigeria and two economic growth variables – domestic savings and domestic investment. As would be expected, the findings do not settle the debate in any direction. However, they could shed some light on the differences between the dimensional and the overall effects of democratization on economic variables.  The results of the analyses show that the short-run responses of growth variables to changes in democratization may differ from their long-run responses.

Does financial development matter for domestic investment? Empirical evidence from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Niharika Sinha ◽  
Swati Shastri
Keyword(s):  
Financial Development ◽  
Principal Component ◽  
Domestic Investment ◽  
Bounds Testing ◽  
Causality Test ◽  
Content Type ◽  
Development Indicators ◽  
Indian Economy ◽  
Long Run ◽  
The Impact

PurposeThis paper empirically examines the impact of financial development on domestic investment in India for the period 1989–2017.Design/methodology/approachThis study employs the autoregressive distributed lag (ARDL) bounds testing approach to co-integration to test the long-run relationship between financial development and domestic investment. To test the direction of causality, Toda–Yamamoto causality test and vector error correction model (VECM) Granger causality/Block Exogeneity Wald test have been employed. Investment has been measured by Gross Capital Formation. To capture various aspects of financial development in India, eight alternative indicators (both bank based and market based) have been used. With the help selected indicators, a composite index (FINDEX) of financial development has been constructed using principal component analysis (PCA).FindingsThe estimated result finds evidence in favour of positive, short-run and long-run impact of financial development on investment in the Indian economy. Both bank-based and market-based indicators are found to significantly affect the level of investment. The significant effect of efficiency-based financial development indicators (both bank based and market based) upon domestic investment implies that there is a need to implement policies that ensure the efficiency of financial intermediation.Originality/valueTo the best of authors' knowledge, not much research has been done to explore the relationship between financial development and domestic investment, especially in the case of Indian economy. This study also tries to find the impact of bank-based and market-based financial development indicators upon domestic investment to explore banks vs market issue.

scholarly journals Transparency of Industry-Sponsored Oncology Patient Financial Assistance Programs Using a Patient-Centered Approach

2017 ◽  
Vol 13 (3) ◽  
pp. e240-e248 ◽  
Author(s):  
S. Yousuf Zafar ◽  
Jeffrey Peppercorn ◽  
Akwasi Asabere ◽  
Alex Bastian
Keyword(s):  
Web Sites ◽  
Free Drug ◽  
Financial Assistance ◽  
Oncology Patient ◽  
Assistance Program ◽  
Specific Patient ◽  
Assistance Programs ◽  
Average Maximum ◽  
Patient Assistance ◽  
The Impact

Objective: Pharmaceutical manufacturers sponsor drug-specific patient assistance programs that provide eligible patients with financial assistance, either in the form of providing the drug free of charge or copayment assistance. Describing these programs and determining who receives assistance is an important first step in understanding the impact and role of financial assistance in cancer care. Our objective was to describe eligibility criteria and benefits for cancer-specific, manufacturer-sponsored patient assistance programs. Methods: We conducted a prospective review of patient assistance program Web sites and called patient assistance program telephone hotlines from the perspective of a patient or caregiver requesting program details. Results: We identified 24 manufacturers with patient assistance programs, covering 87% of Food and Drug Administration–approved oncology drugs. For free drug programs, the average maximum annual income for qualification was $86,279. For copayment assistance programs, the average was $104,790. Thirty-five percent of free drug programs and 53% of copayment assistance programs declined to provide details on how financial need was determined. None of the programs shared details on patient usage statistics. Conclusion: Variation exists in the quality and quantity of data available to patients seeking financial assistance for cancer treatment via manufacturer Web sites and hotlines. Greater transparency among patient assistance programs would enhance utility for patients and help to determine the net impact on costs and adherence.

scholarly journals Capital Flight and the Economic Growth: Evidence from Nigeria

2017 ◽  
Vol 8 (2) ◽  
pp. 125 ◽  
Author(s):  
Adedoyin I. Lawal ◽  
Kelechi Promise Kazi ◽  
Johnson Olabode Adeoti ◽  
Osagie Godswill Osuma ◽  
Sunday O. Akinmulegun ◽  
...  
Keyword(s):  
Economic Growth ◽  
Negative Impact ◽  
Capital Flight ◽  
Current Account Balance ◽  
Foreign Direct Investments ◽  
Domestic Investment ◽  
Foreign Reserve ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This research examined the impact of capital flight and its determinants on the Nigerian economy using the Autoregressive Distributed Lag (ARDL) model to analyze data source from the period of 1981 to 2015. The variables included current account balance, capital flight, foreign direct investments, foreign reserve, inflation rate, external debt, and the real gross domestic product. It was to examine the existence of a long run relationship among the variables studied. The result indicates that capital flight has a negative impact on the economic growth of Nigeria. Therefore, there is a need for government to implement policies that will promote domestic investment and discourage capital flight from Nigeria.

scholarly journals Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka

2018 ◽  
Vol 8 (3) ◽  
pp. 1
Author(s):  
Samantha NPG ◽  
Liu Haiyun
Keyword(s):  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Direct Investment ◽  
Export Performance ◽  
Real Effective Exchange Rate ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Bound Test

Export-led growth hypothesis assumed that long-term economic growth can be achieved through higher exports. Foreign Direct Investment (FDI) is one of the determinants of export performance that can have a substitute effect or complementary relationship to export. The aim of this study is to investigate the impact of inward FDI on the export performance of Sri Lanka during the period from 1980 to 2016. Auto Regressive Distributed Lag (ARDL) model and bound test are applied to identify the long-run relationship and short-run dynamics of the selected variables. The short-run causality is checked by applying the Granger causality test. The ARDL bound test confirms long-run relationship among the variables. The study finds positive insignificant long run and short-run relationships between FDI and exports in Sri Lanka for the data period. Exports are highly sensitive to GDP and real effective exchange rate in the short-run and to domestic investment in the long-run. In order to promote exports via FDI, government policy should focus on attracting more FDI by drawing attention to national competitiveness. The study suggests a comprehensive sector level investigation on the impact of FDI on export performance of Sri Lanka.

Does institutional quality affect capital mobility? Evidence from developing countries

2009 ◽  
Vol 5 (2) ◽  
pp. 207-223 ◽  
Author(s):  
JAVED YOUNAS
Keyword(s):  
Developing Countries ◽  
Foreign Aid ◽  
Capital Mobility ◽  
Positive Impact ◽  
Institutional Quality ◽  
Democratic Accountability ◽  
Domestic Investment ◽  
Savings Rate ◽  
Domestic Savings ◽  
The Impact

AbstractThis paper uses an augmented Feldstein–Horioka savings–investment methodology to examine the impact of institutional quality on the degree of capital mobility in developing countries. A high correlation between domestic investment and domestic savings can arise from the presence of institutional rigidities restricting the movement of capital across borders. We find that including different aspects of institutional quality raises the coefficient of the savings rate, implying lower capital mobility. However, the improvement in institutional quality that strengthens the legal system, reduces investment risks, and ensures democratic accountability, increases capital mobility in developing countries. Inclusion of foreign aid also has a positive impact on the coefficient of the savings rate.

scholarly journals Capital Flight and Domestic Investment in Nigeria: Evidence From ARDL Methodology

2019 ◽  
Vol 11 (1) ◽  
pp. 348
Author(s):  
Lionel Effiom ◽  
Alfa Charles Achu ◽  
Samuel Etim Edet
Keyword(s):  
Cumulative Effect ◽  
Local Economy ◽  
Capital Flight ◽  
Domestic Investment ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
The Impact

Capital flight is a challenge for many developing countries of the world. The problem is more severe in a nation like Nigeria where domestic investment has been terribly affected. This study undertakes an empirical investigation of the impact of capital flight on domestic investment in Nigeria between 1980 and 2017. Deploying the Auto Regressive Distributed Lag (ARDL) econometric methodology, the study finds that capital flight has negative and significant impact on domestic investment. In particular, the long run impact of capital flight on domestic investment (0.57) turns out to be more severe than its impact in the short run (0.27), implying that a continuous and persistent build-up of capital flight exerts a negative cumulative effect on domestic investment over time. The study further reveals that the quality of institutions in Nigeria is a disincentive to domestic investment. It therefore recommends the strengthening of institutions to rein in on the illegal outflow of capital from the Nigerian economy in order to guarantee the availability of investible funds. The real sector of the local economy must be grown to bolster the value of the naira. This will stem the tide of capital flight and attract investments into critical sectors.

The relationships between foreign direct investment, domestic savings, domestic investment, and economic growth: The case of Sub-Saharan Africa

2016 ◽  
Vol 38 (2) ◽  
pp. 193-217
Author(s):  
Nurudeen Abu ◽  
Mohd Zaini Abd Karim
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Sub Saharan Africa ◽  
Domestic Investment ◽  
Long Run ◽  
Domestic Savings ◽  
Sub Saharan ◽  
The Impact

Despite the large body of research on foreign direct investment, domestic savings, domestic investment and economic growth, little has been done to investigate the relationships among them. This paper examines the relationships among foreign direct investment, domestic savings, domestic investment, and economic growth in 16 Sub-Saharan African (SSA) countries from 1981 to 2011, using various techniques. The results of VAR estimation and Granger causality tests demonstrate that there is a unidirectional causality from foreign investment to growth and domestic investment, savings to growth, and a bidirectional causality between growth and domestic investment as well as savings and domestic investment. The results of the variance decomposition analysis reveal that foreign investment exerts more influence on growth. Savings are more important in explaining domestic investment, growth is more important in explaining foreign investment, and domestic investment is more important in explaining savings. Based on the results of the impulse response analysis, there is a positive unidirectional causality from foreign investment to growth and domestic investment, savings to growth, and a positive bidirectional causality between savings and domestic investment, both in the short and long-run. Although there is feedback causality between domestic investment and growth, the impact from investment is negative in the short-run and positive in the long-run. Thus, policies that encourage foreign investment and savings are required to boost domestic investment and promote growth, and policies that raise domestic investment will lead to higher savings and growth in SSA.

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