Systems GMM estimates of the Feldstein–Horioka puzzle for the OECD countries and tests for structural breaks

Testing the validity of the Feldstein–Horioka puzzle for Australia

“…The S-I relationship is important because it has implications for taxation rates and for policies that seek to affect international capital mobility; at the same time there is no doubt that capital accumulation, savings and investment are important stimuli for growth (Coakley et al, 2004;Rao et al, 2009). Feldstein and Horioka (1980) …”

Revisiting the Feldstein–Horioka puzzle with regime switching: New evidence from European countries

“…The model (11) we consider in this paper implicitly assumes that the influence of control variables is embedded in the error term and is assumed to be regime-dependent. Most previous studies, for example, Rao et al (2010) and Bangake and Eggoh (2011), adopt model (10) to test for the FeldsteinHorioka puzzle. In line with the literature, we stick to models (10) and (11).…”

“…Many researchers examine the Feldstein-Horioka puzzle by using panel data together with the panel cointegration approach (e.g., Jansen, 2000;Corbin, 2001;Ho (2002); Kim et al (2005); Kollias et al (2006); Chakrabarti (2006); Christopoulos (2007); Adedeji and Thornton (2008); ; Bangake and Eggoh (2011);Ketenci (2013)). 2 Instead of adopting the panel cointegration approach, a number of researchers focus on the role of policy regime changes (see, for example, Ho (2000); Parmaksiz (, 2003a, 2003b); Telatar et al, (2007); Hatemi-J and Hacker (2007); Kejriwal (2008); Rao et al (2010); Ketenci (2012)). The main findings of these researchers suggest that policy regime changes introduce structural breaks which provide stronger evidence of cointegration between the investment and saving variables in the case of structural break accommodation compared to the case where the presence of structural breaks is ignored.…”

Investment and saving in Angola and the Feldstein–Horioka puzzle

“…Chu (2012) investigates the possible spurious result due to common deflator, basing the research on a theoretical derived relationship, and concluded that the puzzle exists though it is relatively small. Rao et al (2010) investigate the puzzle for the OECD countries with panel data econometrics and they found that there is evidence of the puzzle in the pre-Breton Woods period but not in the posterior period based on improved capital mobility. However, the puzzle does not vanish.…”