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DOES FINANCIAL MARKET DEVELOPMENT STIMULATE SAVINGS? EVIDENCE FROM EMERGING STOCK MARKETS
Author(s) -
BONSERNEAL CATHERINE,
DEWENTER KATHRYN L
Publication year - 1999
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1999.tb00689.x
Subject(s) - stock market , market liquidity , economics , market depth , restricted stock , stock market bubble , monetary economics , stock (firearms) , financial market , empirical evidence , financial economics , business , finance , mechanical engineering , paleontology , horse , biology , engineering , philosophy , epistemology
This paper examines the empirical relation between financial market development, as measured by the stock market, and gross private savings rates in 16 emerging markets over 1982‐1993. With data from all 16 countries, there is evidence of a significant positive relation between savings and stock market size and liquidity. When countries with outlying values for the stock market measures are excluded, however, all significance disappears. The results suggest that a growing or deepening stock market will not necessarily be associated with higher savings rates. ( JEL E21, 016)