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Saving-investment Behaviour in Pakistan: An Empirical Investigation

Author

Listed:
  • Shahbaz Nasir

    (Pakistan Institute of Development Economics, Islamabad.)

  • Mahmood Khalid

    (State Bank of Pakistan, Islamabad.)

Abstract

This paper explores the saving-investment behaviour in Pakistan by identifying their patterns over time and across selected Asian countries. Further potential determinants were empirically tested, based on theoretical foundations of modelling for saving and investment behaviour. Savings in Pakistan for our sample period showed a positive response to GDP growth and government current expenditure while it remained insensitive to interest rates. On the other side, domestic savings and short-run expected returns positively affected investment whereas uncertainty reduced investment.

Suggested Citation

  • Shahbaz Nasir & Mahmood Khalid, 2004. "Saving-investment Behaviour in Pakistan: An Empirical Investigation," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 665-682.
  • Handle: RePEc:pid:journl:v:43:y:2004:i:4:p:665-682
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    File URL: http://www.pide.org.pk/pdf/PDR/2004/4/PartII/Shahbaz.pdf
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    References listed on IDEAS

    as
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    2. Athukorala, Prema-chandra & Sen, Kunal, 2004. "The Determinants of Private Saving in India," World Development, Elsevier, vol. 32(3), pages 491-503, March.
    3. Aasim M. Husain, 1996. "Private Saving and Its Determinants: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(1), pages 49-70.
    4. Peter Nunnenkamp, 1991. "Developing Countries' Attractiveness for Foreign Direct Investment—Debt Overhang and Sovereign Risk as Major Impediments?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 30(4), pages 1145-1158.
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    6. Khan, Ashfaque H. & Hasan, Lubna & Malik, Afia, 1994. "Determinants of National Saving Rate in Pakistan," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 47(4), pages 365-382.
    7. Masson, Paul R & Bayoumi, Tamim & Samiei, Hossein, 1998. "International Evidence on the Determinants of Private Saving," World Bank Economic Review, World Bank Group, vol. 12(3), pages 483-501, September.
    8. Rashid Amjad, 1986. "Impact of Workers' Remittances from the Middle East on Pakistan's Economy: Some Selected Issues," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 25(4), pages 757-785.
    9. Zafar Iqbal, 1993. "Institutional Variations in Saving Behaviour in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1293-1311.
    10. Zafar Mahmood & Mohammad Ali Qasim, 1992. "Foreign Trade Regime and Savings in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(4), pages 883-893.
    11. Nadeem A. Burney & Ashfaque H. Khan, 1992. "Socio-economic Characteristics and Household Savings: An Analysis of the Households' Saving Behaviour in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(1), pages 31-48.
    12. Saleem M. Khan, 1993. "Domestic Resource Mobilisation: A Structural Approach," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1067-1078.
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    Citations

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    Cited by:

    1. Shaikh, Salman, 2012. "Consumption & Savings Behavior in Pakistan," MPRA Paper 42496, University Library of Munich, Germany.
    2. Sharafat, Ali & Hamid, Waqas & Muhammad, Asghar & Raheel Abbas, Kalroo & Muhammad, Ayaz & Mukhtyar, Khan, 2013. "Foreign Capital and Investment in Pakistan: A Cointegration and Causality Analysis," MPRA Paper 55640, University Library of Munich, Germany, revised 28 Apr 2013.
    3. Matthew McCartney, 2011. "Pakistan, Growth, Dependency, and Crisis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 71-94, September.
    4. repec:spr:fininn:v:2:y:2016:i:1:d:10.1186_s40854-016-0028-7 is not listed on IDEAS
    5. Ismail, Aisha & Rashid, Kashif, 2013. "Determinants of household saving: Cointegrated evidence from Pakistan (1975–2011)," Economic Modelling, Elsevier, vol. 32(C), pages 524-531.
    6. Ali, Sharafat, 2013. "A Cointegration Approach to Estimate Private Investment Demand Function of Pakistan," MPRA Paper 49595, University Library of Munich, Germany, revised 02 Sep 2113.
    7. repec:ora:jrojbe:v:2:y:2017:i:2:p:45-55 is not listed on IDEAS
    8. Shaikh, Salman, 2013. "Micro Foundations of Savings Behavior in Urban Pakistan," MPRA Paper 53805, University Library of Munich, Germany.
    9. Saba Mushtaq & Danish Ahmed Siddiqui, 2016. "Effect of interest rate on economic performance: evidence from Islamic and non-Islamic economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-14, December.

    More about this item

    Keywords

    saving Investment; Pakistan;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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