SAVING-INVESTMENT NEXUS IN DEVELOPING COUNTRIES: DOES FINANCIAL DEVELOPMENT MATTER?

Oluwatosin Adeniyi () and Festus O. Egwaikhide
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Festus O. Egwaikhide: University of Ibadan, Nigeria

Journal of Economic Development, 2013, vol. 38, issue 2, 119-140

Abstract: The Feldstein-Horioka puzzle is re-examined using a sample of 20 sub-Saharan Africa (SSA) countries. Unlike the extant literature we demonstrate the expediency of sustenance of financial sector reforms for the saving-investment nexus in SSA. Findings showed saving retention coefficients similar in magnitude to those already reported for developing countries, particularly SSA. In addition, however, the results uncovered a telling intervening role for financial deepening in the saving-investment space. Going forward, the precise nature and corresponding policy implications of this role should form an integral part of discussions in both academic and policy circles.

Keywords: Feldstein-Horioka Coefficient; Panel Mean Reversion; Fixed Effects; Sub Saharan Africa (search for similar items in EconPapers)
JEL-codes: C23 F21 F36 K11 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:38:y:2013:i:2:p:119-140

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