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Does Financial Market Development Stimulate Savings? Evidence From Emerging Stock Markets

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  • CATHERINE BONSER‐NEAL
  • KATHRYN L DEWENTER

Abstract

This paper examines the empirical relation between financial market development, as measured by the stock market, and gross private savings rates in 16 emerging markets over 1982‐1993. With data from all 16 countries, there is evidence of a significant positive relation between savings and stock market size and liquidity. When countries with outlying values for the stock market measures are excluded, however, all significance disappears. The results suggest that a growing or deepening stock market will not necessarily be associated with higher savings rates. (JEL E21, 016)

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  • Catherine Bonser‐Neal & Kathryn L Dewenter, 1999. "Does Financial Market Development Stimulate Savings? Evidence From Emerging Stock Markets," Contemporary Economic Policy, Western Economic Association International, vol. 17(3), pages 370-380, July.
    • Handle: RePEc:bla:coecpo:v:17:y:1999:i:3:p:370-380
    DOI: 10.1111/j.1465-7287.1999.tb00689.x
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    Cited by:

    1. Joel Peress, 2014. "Learning from Stock Prices and Economic Growth," The Review of Financial Studies, Society for Financial Studies, vol. 27(10), pages 2998-3059.
    2. Ricardo M. Sousa, 2003. "Property of stocks and wealth effects on consumption," NIPE Working Papers 2/2003, NIPE - Universidade do Minho.
    3. Sousa, Ricardo M., 2010. "Consumption, (dis)aggregate wealth, and asset returns," Journal of Empirical Finance, Elsevier, vol. 17(4), pages 606-622, September.
    4. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2005. "Does financial liberalization spur growth?," Journal of Financial Economics, Elsevier, vol. 77(1), pages 3-55, July.
    5. Kunofiwa Tsaurai, 2017. "Savings Mobilization and Financial Development during the Multicurrency Regime Period in Zimbabwe," Journal of Economics and Behavioral Studies, AMH International, vol. 9(3), pages 152-162.
    6. Irma Didelija, 2019. "Analysis Of Empirical Literature Of Saving Determinants," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 4(12), pages 111-120, December.
    7. Mansor H. Ibrahim & Muzafar Shah Habibullah, 2010. "Stock market and aggregate consumption asymmetry: evidence from Malaysia," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 27(1), pages 19-29, March.
    8. Manuel Ennes Ferreira & João Dias & Jelson Serafim, 2022. "Stock Market and Economic Growth: Evidence from Africa," Working Papers REM 2022/0228, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    9. Marwan Abdul-Malik Thanoon & Ahmad Zubaidi Baharumshah, 2012. "Comparing Savings Behavior in Asia and Latin America: The Role of Capital Inflows and Economic Growth," Journal of Developing Areas, Tennessee State University, College of Business, vol. 46(1), pages 113-131, January-J.
    10. Mai, Nhat Chi, 2019. "Stock Market And Economic Growth In Vietnam," OSF Preprints de8zq, Center for Open Science.
    11. Dr James Laurenceson, 2002. "The Impact of Stock Markets on China's Economic Development: Some Preliminary Assessments," Discussion Papers Series 302, School of Economics, University of Queensland, Australia.
    12. , Aisdl, 2019. "Stock Market And Economic Growth In Vietnam," OSF Preprints ucbhp, Center for Open Science.

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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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