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Impact of Savings on Capitalization: Case of Southeast Asian Economies

Author

Listed:
  • Gábor Kutasi

    (National University of Public Service, Budapest, Hungary)

  • Andrea Lőrincz

    (Corvinus University of Budapest, Hungary)

  • Eszter Szabó

    (Corvinus University of Budapest, Hungary)

Abstract

The study analyses the economics intuition that the domestic savings may determine the investments in a country. The assumption is tested on domestic savings between 1982 and 2016 in Southeast Asia economies in a panel regression framework. The hypothesis is that domestic savings stimulate economic growth through investment financing and, thus, the high savings rate observed in Southeast Asian countries can contribute to the outstanding GDP growth in the region. The tests sort out the significant determinants of investments. The analysis successfully indicates the significance of domestic savings beside other variables, and confirms the hypothesis, namely, the domestic savings affect investments and indirectly the economic growth, while FDI does not prove to be significant.

Suggested Citation

  • Gábor Kutasi & Andrea Lőrincz & Eszter Szabó, 2019. "Impact of Savings on Capitalization: Case of Southeast Asian Economies," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 5(1), pages 30-40.
    • Handle: RePEc:men:journl:v:5:y:2019:i:1:p:30-40
    DOI: 10.11118/ejobsat.v5i1.155
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    More about this item

    Keywords

    savings; investment; Southeast Asia; FDI; economic growth; Feldstein-Horioka puzzle;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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