Abstract

http://ssrn.com/abstract=910161
 
 

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A Simple Test of the Role of Foreign Direct Investments in the Feldstein-Horioka Puzzle


Paolo Zanghieri


Generali SpA

Gianpaolo Rossini


University of Bologna - Department of Economics


Applied Economics Letters, Vol. 10, No. 1, pp. 39-41, 2003

Abstract:     
The purpose of this paper is to test the dependency of domestic investment on domestic saving in the Feldstein-Horioka spirit. Our innovation is to use a de…nition of investment that does not include foreign direct investment. We do so since FDI should not be considered in the intertemporal budget constraint of a recipient country and therefore should not be related to domestic saving in a meaningful way. Once we adopt, as the dependent variable, pure domestic investment the result is a weakened relationship between internal saving and investment.

Number of Pages in PDF File: 9

Keywords: Feldstein-Horioka Puzzle Foreign Direct Investments

JEL Classification: F3, F4

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Date posted: June 20, 2006  

Suggested Citation

Zanghieri, Paolo and Rossini, Gianpaolo, A Simple Test of the Role of Foreign Direct Investments in the Feldstein-Horioka Puzzle. Applied Economics Letters, Vol. 10, No. 1, pp. 39-41, 2003. Available at SSRN: http://ssrn.com/abstract=910161

Contact Information

Paolo Zanghieri
Generali SpA ( email )
Trieste
Italy
Gianpaolo Rossini (Contact Author)
University of Bologna - Department of Economics ( email )
Strada Maggiore 45
Bologna, 40125
Italy
+39+051+6402607 (Phone)
+39+051+6402664 (Fax)
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