Year 2019, Volume 17, Issue 2, Pages 267 - 292 2019-06-30

REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES

Harub BAL [1] , Emrah Eray AKÇA [2] , İpek TEKİN [3] , Mina Mahjoub LALEH [4]

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Although the neo-classical theory argues that capital should flow from developed countries to the developing countries until the marginal return of investment among countries is equalized, Lucas (1990) reached the conclusion that such capital flows have not occurred from US to India even though the marginal return of capital in India is about 58 times that of US. Lucas explained this paradoxical finding as of stemming from primarily human capital differences, external benefits of human capital and capital market imperfections. Lucas’s paradoxical findings brought intense debates with it on the subject and led to researches on other determinants of capital flows. In accordance with these discussions, our study questioned the existence of Lucas Paradox for BRICS countries (Brazil, Russia, India, China, South Africa) using panel data for 2002-2014 period. Findings obtained from the Augmented-Gravity model confirm the existence of Lucas Paradox in BRICS countries. In other words, marginal return of capital is not an important determinant of capital inflows towards BRICS countries. The general conclusions of the study show that capital inflows depend on institutional quality, agglomeration effect, trade openness degree, exchange rate and volatility of inflation.

Capital Movements, Foreign Direct Investments, Lucas Paradox, Gravity Model, BRICS
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Primary Language en
Subjects Social
Journal Section İktisadi ve idari Bilimler Sayısı
Authors

Orcid: 0000-0003-0878-8253
Author: Harub BAL

Orcid: 0000-0003-4190-5503
Author: Emrah Eray AKÇA

Orcid: 0000-0001-8547-9185
Author: İpek TEKİN

Author: Mina Mahjoub LALEH

Dates

Publication Date: June 30, 2019

Bibtex @research article { cbayarsos585234, journal = {Celal Bayar Üniversitesi Sosyal Bilimler Dergisi}, issn = {1304-4796}, eissn = {2146-2844}, address = {Celal Bayar University}, year = {2019}, volume = {17}, pages = {267 - 292}, doi = {10.18026/cbayarsos.585234}, title = {REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES}, key = {cite}, author = {BAL, Harub and AKÇA, Emrah Eray and TEKİN, İpek and LALEH, Mina Mahjoub} }
APA BAL, H , AKÇA, E , TEKİN, İ , LALEH, M . (2019). REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES. Celal Bayar Üniversitesi Sosyal Bilimler Dergisi, 17 (2), 267-292. DOI: 10.18026/cbayarsos.585234
MLA BAL, H , AKÇA, E , TEKİN, İ , LALEH, M . "REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES". Celal Bayar Üniversitesi Sosyal Bilimler Dergisi 17 (2019): 267-292 <http://dergipark.org.tr/cbayarsos/issue/46659/585234>
Chicago BAL, H , AKÇA, E , TEKİN, İ , LALEH, M . "REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES". Celal Bayar Üniversitesi Sosyal Bilimler Dergisi 17 (2019): 267-292
RIS TY - JOUR T1 - REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES AU - Harub BAL , Emrah Eray AKÇA , İpek TEKİN , Mina Mahjoub LALEH Y1 - 2019 PY - 2019 N1 - doi: 10.18026/cbayarsos.585234 DO - 10.18026/cbayarsos.585234 T2 - Celal Bayar Üniversitesi Sosyal Bilimler Dergisi JF - Journal JO - JOR SP - 267 EP - 292 VL - 17 IS - 2 SN - 1304-4796-2146-2844 M3 - doi: 10.18026/cbayarsos.585234 UR - https://doi.org/10.18026/cbayarsos.585234 Y2 - 2019 ER -
EndNote %0 Celal Bayar Üniversitesi Sosyal Bilimler Dergisi REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES %A Harub BAL , Emrah Eray AKÇA , İpek TEKİN , Mina Mahjoub LALEH %T REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES %D 2019 %J Celal Bayar Üniversitesi Sosyal Bilimler Dergisi %P 1304-4796-2146-2844 %V 17 %N 2 %R doi: 10.18026/cbayarsos.585234 %U 10.18026/cbayarsos.585234
ISNAD BAL, Harub , AKÇA, Emrah Eray , TEKİN, İpek , LALEH, Mina Mahjoub . "REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES". Celal Bayar Üniversitesi Sosyal Bilimler Dergisi 17 / 2 (June 2019): 267-292. https://doi.org/10.18026/cbayarsos.585234
AMA BAL H , AKÇA E , TEKİN İ , LALEH M . REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES. Celal Bayar Üniversitesi Sosyal Bilimler Dergisi. 2019; 17(2): 267-292.
Vancouver BAL H , AKÇA E , TEKİN İ , LALEH M . REEXAMINATION OF LUCAS PARADOX: GRAVITY MODEL APPROACH FOR BRICS COUNTRIES. Celal Bayar Üniversitesi Sosyal Bilimler Dergisi. 2019; 17(2): 292-267.