Research Article | OPEN ACCESS
Feldstein-Horioka (F-H) Approach Test in Developing Countries
1Morteza Cheshti, 2Ali Akbar Naji Meidani and 3Mahmood Baghjari
1Department of Economics, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran
2Department of Economics, Ferdowsi University of Mashhad, Iran
3Departments of Economics, Tarbiat Modares University, Tehran, Iran
Research Journal of Applied Sciences, Engineering and Technology 2014 14:2929-2934
Received: June 17, 2013 | Accepted: July 05, 2013 | Published: April 12, 2014
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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