International Journal of Science and Research (IJSR)

International Journal of Science and Research (IJSR)
Call for Papers | Open Access | Double Blind Reviewed

ISSN: 2319-7064


Downloads: 123

Research Paper | Economics | Sri Lanka | Volume 7 Issue 7, July 2018


International Capital Mobility of Bangladesh, India, Pakistan, and Sri Lanka

Dr. P J Kumarasinghe


Abstract: The degree of capital mobility and the long-run relationship between domestic saving and investment have various policy implications for a county. Feldstein and Horioka (1980) argue that in a world of perfect capital mobility, domestic saving and domestic investment would not be correlated to each other. Economists have studied extensively the relationship between saving and investment for developed countries but the same is not true for developing countries. We study the relationship between saving and investment rates for the four countries, namely, Bangladesh, India, Pakistan and Sri Lanka. We use advanced econometric methods for the study. We use both Jansen (1996) and Johansen cointegration tests to study international capital mobility. We study pair wise Granger causality tests in the VAR setting and use the bivariate Granger causality test. The results show that there is no long run relationship between saving rate and investment rate for the South Asian countries. Hence, we conclude that there is international capital mobility for these countries.


Keywords: Capital Mobility, Error correction Model, Granger causality


Edition: Volume 7 Issue 7, July 2018,


Pages: 1051 - 1054


How to Download this Article?

You Need to Register Your Email Address Before You Can Download the Article PDF


How to Cite this Article?

Dr. P J Kumarasinghe, "International Capital Mobility of Bangladesh, India, Pakistan, and Sri Lanka", International Journal of Science and Research (IJSR), Volume 7 Issue 7, July 2018, pp. 1051-1054, https://www.ijsr.net/get_abstract.php?paper_id=ART2019173

Similar Articles with Keyword 'Error correction Model'

Downloads: 120 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1

Research Paper, Economics, Kenya, Volume 5 Issue 10, October 2016

Pages: 1380 - 1397

Effect of Agency Banking on Financial Inclusion in Kenya

Mark Kariuki Munoru

Share this Article

Downloads: 122

Research Paper, Economics, Kenya, Volume 3 Issue 10, October 2014

Pages: 1666 - 1671

Impact of Selected Macroeconomic Indicators on Inflation in Kenya

Maureen Gathuu | George Kosimbei

Share this Article
Top