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Culture And Savings: Why Do Asians Save More?

Author

Listed:
  • DEZHU YE

    (Department of Finance, Research Institute of Finance, Jinan University, Guangzhou, P. R. China)

  • SHUANG PAN

    (Department of Finance, Jinan University, Guangzhou, P. R. China)

  • YUJUN LIAN

    (Department of Finance, Lingnan College, Sun Yat-sen University, Guangzhou, P. R. China)

  • YEW-KWANG NG

    (School of Economics, Fudan University, P. R. China)

Abstract

It is a basic consensus that culture affects savings, but the empirical evidence is inadequate. This paper investigates the relationship between culture and savings by using the Hofstede cultural indices, and macro data across 48 countries over the period 1990–2013. The results show that country-fixed effects are highly significant, even if traditional variables are controlled for. We discover that culture can explain much of these individual effects and thus is very important in explaining differences in savings across countries. We use the method of Relative Importance Analysis (RIA) to measure the relative importance of the various cultural dimensions in affecting saving rates. We find that culture-related variables are among the most important saving determinants, along with other variables more commonly used in the economics literature, such as economic growth, social security, and demographics.

Suggested Citation

  • Dezhu Ye & Shuang Pan & Yujun Lian & Yew-Kwang Ng, 2021. "Culture And Savings: Why Do Asians Save More?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 66(03), pages 621-651, June.
    • Handle: RePEc:wsi:serxxx:v:66:y:2021:i:03:n:s0217590819500607
    DOI: 10.1142/S0217590819500607
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    Cited by:

    1. Idrees Liaqat & Yongqiang Gao & Faheem Ur Rehman & Zoltán Lakner & Judit Oláh, 2022. "National Culture and Financial Inclusion: Evidence from Belt and Road Economies," Sustainability, MDPI, vol. 14(6), pages 1-21, March.

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