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Are Investment and Savings Cointegrated? Evidence from Middle East and North African Countries

Author

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  • Helmi Hamdi
  • Rashid Sbia

Abstract

The aim of this paper is to empirically examine the relationship between saving and investment for 6 Middle East and North African Countries for the period 1980-2008. To this end, we use panel cointegration analysis and Error Correction Model. The long run estimation reveals causality between investment and saving for the entire sample. The Granger causality tests confirm this result and validate the presence of bidirectional causal relationship between investment and saving. However, the short run estimation shows no causality between the two variables for the entire sample. At the individual level, saving Granger cause investment for Bahrain and Saudi Arabia only.

Suggested Citation

  • Helmi Hamdi & Rashid Sbia, 2013. "Are Investment and Savings Cointegrated? Evidence from Middle East and North African Countries," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 7(4), pages 103-113.
    • Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:4:p:103-113
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    Cited by:

    1. Hamdi, Helmi & Sbia, Rashid, 2013. "Dynamic relationships between oil revenues, government spending and economic growth in an oil-dependent economy," Economic Modelling, Elsevier, vol. 35(C), pages 118-125.
    2. Santiago Grullon, 2016. "The Feldstein-Horioka Hypothesis: Co-Integration and Causality Results for Selected Countries," Quarterly Journal of Business Studies, Research Academy of Social Sciences, vol. 2(3), pages 134-142.
    3. Hakimi, Abdelaziz & Hamdi, Helmi, 2015. "How Corruption affect Growth in MENA region? Fresh Evidence from a Panel Cointegration Analysis," MPRA Paper 63750, University Library of Munich, Germany.

    More about this item

    Keywords

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    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
    • 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

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