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The effects of saving-investment gap on economic growth in developing countries: A clustering and panel data analysis

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  • Ismet GOCER

    (Adnan Menderes University, Aydin, Turkey)

  • Tugba AKIN

    (Adnan Menderes University, Aydin, Turkey)

  • Sedat ALATAS

    (Adnan Menderes University, Aydin, Turkey)

Abstract

In this study, the effect of saving-investment gap on economic growth was analyzed on sample of 65 developing countries for 1981-2014 period. Firstly, these countries were categorized into sub-groups according to their saving-investment gap data by using clustering analysis. Then, panel unit root were performed for each cluster and overall panel, and panel coefficients were estimated. In conclusion; it was determined that while the effect of saving on economic growth is positive and statistically significant in developing countries which have savings over investment, this effect is negative and statistically insignificant in developing countries which have investment over savings. It was considered that this study will bring novelty to literature since it combined panel data analysis and clustering analysis together.

Suggested Citation

  • Ismet GOCER & Tugba AKIN & Sedat ALATAS, 2016. "The effects of saving-investment gap on economic growth in developing countries: A clustering and panel data analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(607), S), pages 157-172, Summer.
    • Handle: RePEc:agr:journl:v:xxiii:y:2016:i:2(607):p:157-172
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    References listed on IDEAS

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    1. Ahmed, Shaghil & Zlate, Andrei, 2014. "Capital flows to emerging market economies: A brave new world?," Journal of International Money and Finance, Elsevier, vol. 48(PB), pages 221-248.
    2. B. Bayraktar-Saglam & A.Y. Yalta, 2015. "Current Account Imbalances and Capital Flows," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 7(2), pages 201-213, May.
    3. Bacha, Edmar L., 1990. "A three-gap model of foreign transfers and the GDP growth rate in developing countries," Journal of Development Economics, Elsevier, vol. 32(2), pages 279-296, April.
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    Cited by:

    1. Muhammad Aslam & Wajid Alim & Naeem Khan, 2022. "Nexus between Capital Flows and Economic Growth: An Evidence from South Asian Countries," Journal of Economic Impact, Science Impact Publishers, vol. 4(2), pages 14-21.

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