Panel cointegration results on international capital mobility in Asian economies

This paper investigates the Feldstein–Horioka coefficients for 11 Asian countries using the recently developed ‘between-group’ FMOLS and DOLS panel cointegration techniques. Savings and investment rates are found to be nonstationary and to be cointegrated in panels. The estimated coefficients using FMOLS and DOLS are 0.39 and 0.42, respectively, for the period 1980–1998. These values are much smaller than the estimates of 0.58 and 0.76 for 1960–1979. The small coefficients suggest that capital mobility increased in Asian countries in the 1980s and 1990s.