Abstract

The main objective of the present study is studying role of foreign aids and trade integrity on international mobility of capital in selected developing states. For do it, Feldstein-Horioka is applied for Iran economy. The obtained results are compatible with the common expectations related to the mobility of capital. Positivism of coefficients of variables of foreign aids indicates that accessing resources of financial funds in developing states has been increased with the increase of financial liberalization. Receiving foreign aids will result in increased supply of resources for granting loan, based on which, relation between domestic investments and saving will be diminished. Also, with receiving giant foreign loans by the mentioned countries, these countries will activate their investment and production cycles and their dependencies on domestic savings will be lessened.

Keywords:

Capital mobility, Feldstein-Horioka, saving, trade,

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Competing interests

The authors have no competing interests.

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