DOI: 10.36347/sjebm.2014.v01i11.006

Pages: 568-575

This paper applies recursive cointegration analysis to examine the dynamic changes in Feldstein-Horioka (1980) savings-investment (S-I) coefficients across China and the ASEAN-5 countries over time. To the extent that the S-I coefficients measure international capital mobility, the main empirical results are as follows. First, the recursive trace statistics show that savings-investment linkages vary in these six countries. Second, there is no cointegration between the two factors in four countries - China, Singapore, Malaysia, and Thailand - meaning that capital market mobility in these countries is high and domestic investment in the four is financed by the global pool of capital. Third, for Indonesia and Philippines, there is a cointegration between savings and investment before 2001 for them, implying that they achieved highly mobile and open capital markets later than the other countries.