Determinants of Saving Behavior in Pakistan

Shah, Syed Manzoor Hussain; Babar, Muhammad Niamatullah Khan; Zaman, Khair Uz; Rehman, Abdur; Shah, Mehmood; Muhammad, Atta

doi:10.9734/ajaees/2016/29350

Cited by 1 publication

(10 citation statements)

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“…According to the results of long run ARDL, signs of coefficients of all independent variables are according to hypotheses and are statistically significant. The coefficient of the GDP growth rate is positive in consistency with the results of Shah et al . (2016), Saltz (1999), Anoruo and Ahmad (2001), etc.…”

Section: Summary Conclusion and Recommendationssupporting

confidence: 91%

“…(1995), etc.The coefficient of budget surplus should be positive as predicted by Corbo and Schmidt-Habbel (1991), Haque and Montiel (1989), etc.The coefficient of the growth rate of GDP should be positive as predicted by Shah et al . (2016), Saltz (1999), Anoruo and Ahmad (2001), etc.The coefficient of the real interest rate should be positive as postulated by Keynesian savings theory and Balassa (1989), etc.The coefficient of rate of inflation should be negative as predicted by Stockman (1981), Miller and Benjamin (2008), Shah et al . (2016), etc.The coefficient of the social factor and total dependency ratio, should be negative as predicted by Metin-Ozcan et al .…”

Section: Model Methodology and Datamentioning

confidence: 92%

“…Determinants of savings have been estimated by Ahmed et al . (2015) and Shah et al . (2016) for Pakistan, by Metin-Ozcan et al .…”

Section: Review Of Literaturementioning

confidence: 97%

“…However, their result of negative effect of the GDP growth rate on saving is counter intuitive. Shah et al . (2016) analyse the determinants of savings in Pakistan using the autoregressive distributed lag (ARDL) model specification.…”

Section: Review Of Literaturementioning

confidence: 99%

“…These theories have been tested and different determinants of savings behaviour have been explored by several researchers in the context of different countries and regions including Ahmed et al (2015), Shah et al (2016), Metin-Ozcan et al (2003), Nagawa et al (2020), Bhandari et al (2007) and Thanoon and Baharumshah (2005).…”

Section: Determinantsmentioning

confidence: 99%

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Determinants of savings behaviour in Saudi Arabia

Khawaja

2022

IJSE

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PurposeThe objective of the study is to explore the determinants of savings and their relative importance in Saudi Arabia.Design/methodology/approachThe stationarity of the data has been tested using augmented Dickey–Fuller (ADF) tests. Autoregressive distributed lag (ARDL) technique has been applied to establish the long run and short run relationships. Stability of savings function has been tested by applying CUSUM and CUSUMSQ techniques.FindingsResults of ARDL identify the important factors affecting savings behaviour in Saudi Arabia. According to the results, the growth rate of GDP, the interest rate, foreign direct investment (FDI) and budget surplus positively affect savings with the last two having the most influence on domestic savings. The coefficient of the dependency ratio is negative in conformity with the theory. Similarly, the coefficient of the inflation rate is also negative.Research limitations/implicationsThere is limited availability of data since only 41 years’ annual data are available.Practical implicationsIn the light of the results, it is recommended that in order to increase savings, the government should adopt policies to attract FDI, increase the GDP growth rate and decrease the dependency ratio and inflation.Social implicationsGovernment needs to discourage larger family sizes to encourage savings in the light of the result of negative impact of the dependency ratio on savings. In order to decrease the dependency ratio, more family members especially women should be encouraged to participate in the labour market.Originality/valueThere is a scarcity of research for Saudi Arabia on the critical issue of determinants of domestic savings. This is a pioneering study exploring important determinants of savings in Saudi data.Peer reviewThe peer review history for this article is available at https://publons.com/publon/10.1108/IJSE-08-2021-0493.

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Section: Summary Conclusion and Recommendationssupporting

confidence: 91%