Journal of World Economic Research 2015; 4(5-1): 1-7 Published online August 12, 2015 (http://www.sciencepublishinggroup.com/j/jwer) doi: 10.11648/j.jwer.s.2015040501.11 ISSN: 2328-773X (Print); ISSN: 2328-7748 (Online) Global Capital Mobility: Some New Empirical Evidence Anisul M. Islam 1, * , Muhammad Mustafa 2 , Matiur Rahman 3 1 Economics, College of Business, University of Houston-Downtown, Houston, USA 2 Economics, South Carolina State University, Orangeburg, USA 3 Finance, McNeese State University, Lake Charles, USA Email address: islama@uhd.edu (A. M. Islam), mmustafa@scsu.edu (M. Mustafa), mrahman@mcneese.edu (M. Rahman) To cite this article: Anisul M. Islam, Muhammad Mustafa, Matiur Rahman. Global Capital Mobility: Some New Empirical Evidence. Journal of World Economic Research. Special Issue: The Globalization and Economic Structure Changes. Vol. 4, No. 5-1, 2015, pp. 1-7. doi: 10.11648/j.jwer.s.2015040501.11 Abstract: Using Saving-Investment relationship as indirect evidence of global capital mobility, this paper empirically examines the capital mobility hypothesis using new data for forty developing countries. The paper utilizes annual data over 1960-2013 period, the longest time period of 54 years for as many developing countries ever used with a panel sample size of 2,160 (40 x 54) annual observations, the longest time periods and largest cross-sections ever used previously. For this study, panel regression analysis was used to estimate the relationship and then use the relationship to test some hypothesis regarding the capital mobility. The study finds evidence of partial capital mobility among the sample developing countries, and the degree of capital mobility was found to be stronger than that originally found by Feldstein and Horioka. Keywords: Savings, Investment, Global Capital Mobility, Panel Regression 1. Introduction The world has been witnessing increased globalization over the years, particularly since the fall of the Berlin Wall and the collapse of the Iron Curtain in 1989. This increased global integration is expected to lead to increased flow of goods, services, technology and resources including capital and financial resources. Of course, some of those may be more mobile than others, such as goods mobility might be higher than labor mobility, for example. Similarly, capital is expected to be more mobile than labor and capital mobility is also expected to have increased over the years in response to increased globalization and resulting deeper global integration. At the same time, it is also expected that capital mobility may be stronger among developed countries than developing countries to the extent that the financial markets in the former are likely to be open to capital mobility than the latter. This is, perhaps, due at least partly to higher level capital controls and public interventions in various forms to safeguard national economies from sudden and unexpected external negative financial shocks. In light of this expectation, this study empirically examines the degree of global capital mobility across a group of 40 developing countries spanning the period from 1960 to 2013 for a sample period of 54 years, the longest time period ever used in previous studies. To analyze the issue of international capital mobility, we applied an indirect quantitative approach using domestic savings-investment correlation as a measure of international capital mobility. This approach is more convenient and applicable to all countries due to easier availability of reliable data. The remainder of the paper is presented as follows. The section II presents a brief review of literature, while section III develops the empirical model along with hypothesis development. Section IV discusses the data followed by empirical results in section V. Section VI presents some concluding remarks. 2. A Brief Review of Literature This approach was first applied in the seminal paper by Feldstein and Horioka (1980) using annual data on savings and investment rates for 16 OECD countries from 1960 through 1974 for cross-correlation. They hypothesized that domestic saving and investment rates are unrelated with perfect international capital mobility since it enables each country’s savings to respond to global investment opportunities while investment in each country is financed by accessing the global savings pool. Surprisingly, Feldstein-Horioka (1980) concluded that the