Advanced Search
MyIDEAS: Login to save this paper or follow this series

Private Saving in India and Malaysia Compared: The Role of Financial Liberalization and Expected Pension Benefits

Contents:

Author Info

  • Ang, James
  • Sen, Kumal

Abstract

In this paper, we provide a comparative account of the evolution of private saving in India and Malaysia, and analyze how policy changes in the financial sectors and pension systems help explain differences in their saving performance. Using the ARDL bounds estimation procedure, we find a fairly robust long-run relationship between private saving and its determinants in both countries. Consistent with the predictions made in the life cycle model, our results indicate that higher income growth stimulates private saving and an increase in age dependency retards private saving. The results provide some support for the hypothesis that financial liberalization results in lower private saving in both countries. The evidence also indicates that expected pension benefits tend to stimulate private saving in India, but that the reverse is found in Malaysia.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/14413/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14413.

as in new window
Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:pra:mprapa:14413

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: private savings; pension saving; financial liberalization; India; Malaysia;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Junsoo Lee & Mark C. Strazicich, 2003. "Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1082-1089, November.
  2. Edwards, Sebastian, 1996. "Why are Latin America's savings rates so low? An international comparative analysis," Journal of Development Economics, Elsevier, Elsevier, vol. 51(1), pages 5-44, October.
  3. Ang, James B. & McKibbin, Warwick J., 2007. "Financial liberalization, financial sector development and growth: Evidence from Malaysia," Journal of Development Economics, Elsevier, Elsevier, vol. 84(1), pages 215-233, September.
  4. Ang, James B., 2010. "Research, technological change and financial liberalization in South Korea," Journal of Macroeconomics, Elsevier, Elsevier, vol. 32(1), pages 457-468, March.
  5. James Ang, 2008. "Finance And Inequality: The Case Of India," Development Research Unit Working Paper Series, Monash University, Department of Economics 08/08, Monash University, Department of Economics.
  6. Tamim Bayoumi, 1992. "Financial Deregulation and Household Saving," Bank of England working papers 5, Bank of England.
  7. Hélène Poirson, 2007. "Financial Market Implications of India's Pension Reform," IMF Working Papers 07/85, International Monetary Fund.
  8. Hermes, Niels & Lensink, Robert, 2005. "Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence from 25 Emerging Market Economies, 1973-96," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2005/69, World Institute for Development Economic Research (UNU-WIDER).
  9. Kose, Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2006. "Financial Globalization: A Reappraisal," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5842, C.E.P.R. Discussion Papers.
  10. Munnell, Alicia H, 1976. "Private Pensions and Saving: New Evidence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 84(5), pages 1013-32, October.
  11. Philippe Aghion & Diego Comin & Peter Howitt, 2006. "When Does Domestic Saving Matter for Economic Growth?," DEGIT Conference Papers c011_030, DEGIT, Dynamics, Economic Growth, and International Trade.
  12. Reinhart, Carmen & Ogaki, Masao & Ostry, Jonathan, 1996. "Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison," MPRA Paper 6978, University Library of Munich, Germany.
  13. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, Econometric Society, vol. 55(2), pages 251-76, March.
  14. Bewley, R. A., 1979. "The direct estimation of the equilibrium response in a linear dynamic model," Economics Letters, Elsevier, Elsevier, vol. 3(4), pages 357-361.
  15. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
  16. Jappelli, Tullio & Pagano, Marco, 1994. "Saving, Growth, and Liquidity Constraints," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(1), pages 83-109, February.
  17. Christian Thimann & Anuradha Dayal-Gulati, 1997. "Saving in Southeast Asia and Latin America Compared," IMF Working Papers 97/110, International Monetary Fund.
  18. James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
  19. Panicos Demetriades & Kul B. Luintel, 1995. "The Direct Costs of Financial Repression: Evidence from India," Keele Department of Economics Discussion Papers (1995-2001), Department of Economics, Keele University 95/12, Department of Economics, Keele University.
  20. Ang, James B., 2009. "Private Investment and Financial Sector Policies in India and Malaysia," World Development, Elsevier, Elsevier, vol. 37(7), pages 1261-1273, July.
  21. Robert Gillingham & Daniel Kanda, 2001. "Pension Reform in India," IMF Working Papers 01/125, International Monetary Fund.
  22. Jakob B. Madsen & Shishir Saxena & James B. Ang, 2008. "The Indian Growth Miracle And Endogenous Growth," CAMA Working Papers 2008-29, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  23. James B. Ang, 2010. "Does Foreign Aid Promote Growth? Exploring the Role of Financial Liberalization," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 14(2), pages 197-212, 05.
  24. Oriana Bandiera & Gerard Caprio Jr. & Patrick Honohan & Fabio Schiantarelli, 1998. "Does Financial Reform Raise or Reduce Savings?," Boston College Working Papers in Economics, Boston College Department of Economics 413, Boston College Department of Economics.
  25. Niels Hermes & Robert Lensink, 2008. "Does financial liberalization influence saving, investment and economic growth: evidence from 25 emerging market economies, 1973-1996," ULB Institutional Repository 2013/14403, ULB -- Universite Libre de Bruxelles.
  26. Norman Loayza & Rashmi Shankar, 2000. "Private Saving in India," World Bank Economic Review, World Bank Group, World Bank Group, vol. 14(3), pages 571-594, September.
  27. Patrick, Hugh T. & Yung Chul Park, (ed.), 1994. "The Financial Development of Japan, Korea, and Taiwan: Growth, Repression, and Liberalization," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195087666, October.
  28. James Ang, 2009. "Household Saving Behaviour in an Extended Life Cycle Model: A Comparative Study of China and India," Journal of Development Studies, Taylor & Francis Journals, vol. 45(8), pages 1344-1359.
  29. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
  30. Pentecost, Eric J & Moore, Tomoe, 2006. "Financial Liberalization in India and a New Test of the Complementarity Hypothesis," Economic Development and Cultural Change, University of Chicago Press, vol. 54(2), pages 487-502, January.
  31. Martin Mühleisen, 1997. "Improving India's Saving Performance," IMF Working Papers 97/4, International Monetary Fund.
  32. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
Full references (including those not matched with items on IDEAS)

Citations

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

Cited by:
  1. Ang, James, 2010. "Savings Mobilization, Financial Development and Liberalization: The Case of Malaysia," MPRA Paper 21718, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:14413. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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