Does the quality of institutions enhance savings? : the case of Sub-Saharan Africa

Elliot Boateng, Frank W. Agbola, Amir Mahmood

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

Over the last three decades, there has been increasing disparity in savings across regions and income groupings globally. In this paper, we investigate whether the quality of institutions explains the saving disparities in Sub-Saharan Africa (SSA). Utilizing comprehensive panel data and spanning the period 1980–2015, we estimate a savings model using the two-step instrumental variable generalized method of moment (2SIV-GMM) estimator. Our results show that the impact of institutions on savings behaviour differs across regions and income groupings, and in SSA, in aggregate. We find that the level and growth of per capita income and terms of trade enhance savings whereas government consumption expenditure, financial sector development and the elderly dependency rate are savings impeding. The findings are robust to alternative model specification and highlight the importance of institutions in influencing savings behaviour in SSA.
Original languageEnglish
Pages (from-to)6235-6263
Number of pages29
JournalApplied Economics
Volume51
Issue number58
DOIs
Publication statusPublished - 2019

Keywords

  • Africa_Sub, Saharan
  • finance
  • finance_personal
  • financial institutions
  • government policy
  • investments_foreign
  • saving and investment

Fingerprint

Dive into the research topics of 'Does the quality of institutions enhance savings? : the case of Sub-Saharan Africa'. Together they form a unique fingerprint.

Cite this