Determinants of National Saving In Saudi Arabia

Touny, Mahmoud; Khder, Jameel Ahmed

doi:10.21608/aja.2013.19847

	Determinants of National Saving In Saudi Arabia
المجلة العربية للإدارة
Article 13, Volume 33, Issue 1, June 2013, Page 263-280 PDF (955.2 K)
Document Type: بحوث باللغة الإنجلیزیة
DOI: 10.21608/aja.2013.19847
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Authors
Mahmoud Touny¹^{, 2}; Jameel Ahmed Khder³
¹Faculty of Commerce & Business Administration -Helwan University
²Associate Professor - Faculty of Applied Studies and Community Services, Dammam University
³Department of Administrative Sciences Marketing Program Riyadh Community College King Saud University, KSA
Abstract
This paper has analyzed the determinants of national savings in Saudi Arabia during the period 1980-2010. The ADF test is used to investigate the stationary of all time series, and after that, we estimated unrestricted VAR model. The results of the estimated VAR model provide evidence that the growth rate of per capita income, population growth, and financial depths have positive influence on national savings in Saudi Arabia during the period study. On the other hand, macroeconomic uncertainty, as measured by the inflation indicates a negative but insignificant effect on national saving rate. Foreign reserves ratio appears to have a negative effect on national savings, which implies that foreign saving may tend to act as a substitute to national savings. Moreover,the results of our study confirm that budget deficit ratio has a negative and statistically significant effect on the national saving ratio, which does not support the Ricardian hypothesis due to the limited use of taxes as a tool of fiscal policy in Saudi Arabia. This result suggests that government should use fiscal policyto reduce budget deficit, and restructure government expenditure in the way that can boost private savings and thus offset the negative effect on national savings.
Keywords
Determinants of National Saving In Saudi Arabia


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