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Determinants of Private Saving in South Asia

Author

Listed:
  • Rabindra Bhandari

    (Rabindra Bhandari is with Department of ABEMIS, Westminster College, Fulton, MO 6551, MO, US. Email: rabindra.bhandari@Westminster-mo.edu)

  • Dharmendra Dhakal

    (Dharmendra Dhakal is with Department of Economics & Finance, Tennessee State University Nashville, TN 37203-3401, USA. Email: ddhakal@tnstate.edu)

  • Gyan Pradhan

    (Gyan Pradhan is with Department of ABEMIS, Westminster College, Fulton, MO 65251, USA. Email: pradhang@westminster-mo.edu)

  • Kamal P. Upadhyaya

    (Kamal P. Upadhyaya (corresponding author) is with Department of Economics & Finance, University of New Haven, 300 Boston Post Road, West Haven, CT 06516, USA. Email: Kupadhyaya@newhaven.edu)

Abstract

This article examines the determinants of private saving rates in five South Asian nations using annual time series data. An econometric model is developed in which private saving is a function of government expenditures, the money supply, the real interest rate, macroeconomic instability, per capita income growth and two demographic variables. Prior to carrying out the estimations, we test for the stationarity of the data series by carrying out unit root tests. The overall results indicate that government expenditures and past savings have a negative impact on private saving, while the level of financial development and per capita income growth have a positive effect. The degree of urbanization, the real interest rate and the dependency ratio have no noticeable impact on private saving.

Suggested Citation

  • Rabindra Bhandari & Dharmendra Dhakal & Gyan Pradhan & Kamal P. Upadhyaya, 2007. "Determinants of Private Saving in South Asia," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 8(2), pages 205-217, December.
    • Handle: RePEc:sae:soueco:v:8:y:2007:i:2:p:205-217
    DOI: 10.1177/139156140700800202
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    References listed on IDEAS

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    3. ARIÇ Kıvanç Halil & SEK Siok Kun & de SOUSA Miguel Rocha, 2021. "Current Account Balance In Emerging Asia," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 16(1), pages 12-25, April.
    4. 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.
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    6. Kivanç Halil ARIÇ, 2015. "Determinants of savings in the APEC countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(603), S), pages 113-122, Summer.
    7. Sahoo, Pravakar & Dash, Ranjan Kumar, 2013. "Financial sector development and domestic savings in South Asia," Economic Modelling, Elsevier, vol. 33(C), pages 388-397.
    8. Biru Paksha Paul, 2013. "Output Relationships in South Asia: Are Bangladesh and India Different from Neighbours?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(1), pages 35-57, March.
    9. Yaya Keho, 2011. "Long‐Run Determinants Of Savings Rates In Waemu Countries: An Empirical Assessment From Ardl Bounds Testing Approach," South African Journal of Economics, Economic Society of South Africa, vol. 79(3), pages 312-329, September.
    10. Emara, Noha & KASA, Hicran, 2020. "The Non-Linear Relationship between Financial Access and Domestic Savings," MPRA Paper 99256, University Library of Munich, Germany.

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