IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v53y2021i3p345-363.html
   My bibliography  Save this article

The non-linear relationship between financial access and domestic savings: the case of emerging markets

Author

Listed:
  • Noha Emara
  • Hicran Kasa

Abstract

This paper examines the impact of financial access on the accumulation of domestic savings in emerging markets (EMs) covering countries from Latin America, Europe, Middle East, and Africa (EMEA), and Asia as classified by the Morgan Stanley Capital International (MSCI) index. We use the System Generalized Method of Moments panel estimation methodology on annual data spanning the period 1980-2018. Principal component analysis allows us to create a financial access index as a linear combination of two variables measured per 100,000 adults: number of bank branches per and number of ATMs.The results of the paper reveal a statistically significant nonlinear relationship between the improvement in financial access measures and the accumulation of domestic savings with a definite threshold level. More specifically, our results for the full sample indicate that improvement in financial access may initially increase the savings rateleading to an increase in savings. Nevertheless, once the financial access index reaches its threshold level further improvement in financial access tends decrease households’ precautionary savings and to give rise to a decline in savings. Thus, the duality of the pattern highlights the non-linearity of financial access and domestic savings.

Suggested Citation

  • Noha Emara & Hicran Kasa, 2021. "The non-linear relationship between financial access and domestic savings: the case of emerging markets," Applied Economics, Taylor & Francis Journals, vol. 53(3), pages 345-363, January.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:3:p:345-363
    DOI: 10.1080/00036846.2020.1808174
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2020.1808174
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2020.1808174?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zeng, Miao & Du, Jiang & Zhu, Xiaoyu & Deng, Xin, 2023. "Does internet use drive rural household savings? Evidence from 7825 farmer households in rural China," Finance Research Letters, Elsevier, vol. 57(C).
    2. Dong-Hyeon Kim & Peiyao Liu & Shu-Chin Lin, 2024. "The moderating role of financial development in the nexus between population aging and saving," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-32, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:53:y:2021:i:3:p:345-363. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.