Savings and investment in South Asia: evidence from likelihood ratio based panel cointegration

Article

Wahid, Abu N. M., Salahuddin, Mohammad and Noman, Abdullah M.. 2010. "Savings and investment in South Asia: evidence from likelihood ratio based panel cointegration." Journal of Economic Studies. 37 (6), pp. 658-666. https://doi.org/10.1108/01443581011086684
Article Title

Savings and investment in South Asia: evidence from likelihood ratio based panel cointegration

ERA Journal ID18417
Article CategoryArticle
AuthorsWahid, Abu N. M. (Author), Salahuddin, Mohammad (Author) and Noman, Abdullah M. (Author)
Journal TitleJournal of Economic Studies
Journal Citation37 (6), pp. 658-666
Number of Pages9
Year2010
Place of PublicationBingley, United Kingdom
ISSN0144-3585
1758-7387
Digital Object Identifier (DOI)https://doi.org/10.1108/01443581011086684
Abstract

Purpose: This paper seeks to contribute to the study of the relationship between savings and investment in a panel of five South Asian countries.
Design/methodology/approach: A number of unit root tests such as Levin, Lin, and Chu or LLC, Breitung, Im, Pesaran, and Shin or IPS, Fisher-type tests using ADF and Fisher-type tests using PP tests are conducted that confirm the non-stationarity of data. Then the paper applies maximum likelihood-based panel cointegration method to examine the relationship between savings and investment using data on investment and savings for five South Asian developing countries, namely, Bangladesh, Pakistan, India, Nepal, and Sri Lanka over the period 1973-2007 compiled from the World Development Indicator (WDI) Database 2008 CD-ROM.
Findings: The results obtained suggest that savings and investment are cointegrated, which implies that the Feldstein-Horioka (F-H) puzzle does not hold in this region. It is also found that most of these countries have maintained an international solvency condition. Originality/value: This is another contribution that would enrich the existing literature on the F-H puzzle. The paper includes data that involve the longest sample period. No other study, as of now, has employed the panel cointegration method to study the savings investment relationship in this region.

Keywordsinvestments; savings; south Asia
ANZSRC Field of Research 2020440499. Development studies not elsewhere classified
380110. International economics
380112. Macroeconomics (incl. monetary and fiscal theory)
Public Notes

© Emerald Group Publishing Limited. Permanent restricted access to published version due to publisher copyright policy.

Byline AffiliationsTennessee State University, United States
Southeast University, Bangladesh
American International University, Bangladesh
Institution of OriginUniversity of Southern Queensland
Permalink -

https://research.usq.edu.au/item/q2w6z/savings-and-investment-in-south-asia-evidence-from-likelihood-ratio-based-panel-cointegration

Log in to edit
  • 1651
    total views
  • 5
    total downloads
  • 2
    views this month
  • 0
    downloads this month

Export as

Related outputs

Urbanization-globalization-CO2 emissions nexus revisited: empirical evidence from South Africa
Salahuddin, Mohammad, Gow, Jeff, Ali, Md. Idris, Hossain, Rahat, Al-Azami, Khaleda Shaheen, Akbar, Delwar and Gedikli, Ayfer. 2019. "Urbanization-globalization-CO2 emissions nexus revisited: empirical evidence from South Africa." Heliyon. 5 (6), pp. 1-9. https://doi.org/10.1016/j.heliyon.2019.e01974
Globalisation, poverty and corruption: retarding progress in South Africa
Salahuddin, Mohammad, Vink, Nick, Ralph, Nicholas and Gow, Jeff. 2020. "Globalisation, poverty and corruption: retarding progress in South Africa." Development Southern Africa. 37 (4), pp. 617-643. https://doi.org/10.1080/0376835X.2019.1678460
Effects of environmental quality on agricultural productivity in sub Saharan African countries: a second generation panel based empirical assessment
Salahuddin, Mohammad, Gow, Jeff and Vink, Nick. 2020. "Effects of environmental quality on agricultural productivity in sub Saharan African countries: a second generation panel based empirical assessment." Science of the Total Environment. 741. https://doi.org/10.1016/j.scitotenv.2020.140520
Effects of economic growth, foreign direct investment and internet use on child health outcomes: empirical evidence from South Africa
Salahuddin, Mohammad, Vink, Nick, Ralph, Nicholas and Gow, Jeff. 2020. "Effects of economic growth, foreign direct investment and internet use on child health outcomes: empirical evidence from South Africa." Development Studies Research. 7 (1), pp. 1-17. https://doi.org/10.1080/21665095.2020.1717362
Effects of energy consumption and economic growth on environmental quality: evidence from Qatar
Salahuddin, Mohammad and Gow, Jeff. 2019. "Effects of energy consumption and economic growth on environmental quality: evidence from Qatar." Environmental Science and Pollution Research. 26 (19), pp. 18124-18142. https://doi.org/10.1007/s11356-019-05188-w
The effects of urbanization and globalization on CO2 emissions: evidence from the Sub-Saharan Africa (SSA) countries
Salahuddin, Mohammad, Ali, Md. Idris, Vink, Nick and Gow, Jeff. 2019. "The effects of urbanization and globalization on CO2 emissions: evidence from the Sub-Saharan Africa (SSA) countries." Environmental Science and Pollution Research. 26 (3), pp. 2699-2709. https://doi.org/10.1007/s11356-018-3790-4
Contribution of the internet towards sustainable development through its economic growth, social capital and environmental effects
Salahuddin, Mohammad. 2016. Contribution of the internet towards sustainable development through its economic growth, social capital and environmental effects. PhD Thesis Doctor of Philosophy. University of Southern Queensland.
Ecological footprint and real income: panel data evidence from the 27 highest emitting countries
Uddin, Gazi Ashir, Salahuddin, Mohammad, Alam, Khorshed and Gow, Jeff. 2017. "Ecological footprint and real income: panel data evidence from the 27 highest emitting countries." Ecological Indicators. 77, pp. 166-175. https://doi.org/10.1016/j.ecolind.2017.01.003
Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?
Salahuddin, Mohammad, Gow, Jeff and Ozturk, Ilhan. 2015. "Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?" Renewable and Sustainable Energy Reviews. 51, pp. 317-326. https://doi.org/10.1016/j.rser.2015.06.005
The effects of electricity consumption, economic growth, financial development and foreign direct investment on CO2 emissions in Kuwait
Salahuddin, Mohammad, Alam, Khorshed, Ozturk, Ilhan and Sohag, Kazi. 2018. "The effects of electricity consumption, economic growth, financial development and foreign direct investment on CO2 emissions in Kuwait." Renewable and Sustainable Energy Reviews. 81 (2), pp. 2002-2010. https://doi.org/10.1016/j.rser.2017.06.009
The effects of internet usage, financial development and trade openness on economic growth in South Africa: a time series analysis
Salahuddin, Mohammad and Gow, Jeff. 2016. "The effects of internet usage, financial development and trade openness on economic growth in South Africa: a time series analysis." Telematics and Informatics. 33 (4), pp. 1141-1154. https://doi.org/10.1016/j.tele.2015.11.006
The effects of internet usage and economic growth on CO2 emissions in OECD countries: a panel investigation
Salahuddin, Mohammad, Alam, Khorshed and Ozturk, Ilhan. 2016. "The effects of internet usage and economic growth on CO2 emissions in OECD countries: a panel investigation." Renewable and Sustainable Energy Reviews. 62, pp. 1226-1235. https://doi.org/10.1016/j.rser.2016.04.018
Does internet stimulate the accumulation of social capital? A macro-perspective from Australia
Salahuddin, Mohammad, Tisdell, Clem, Burton, Lorelle and Alam, Khorshed. 2016. "Does internet stimulate the accumulation of social capital? A macro-perspective from Australia." Economic Analysis and Policy. 49, pp. 43-55. https://doi.org/10.1016/j.eap.2015.11.011
Determinants of gross investment in Bangladesh: a time series evidence
Wahid, Abu N. M., Islam, Md. Rabiul and Salahuddin, Mohammad. 2013. "Determinants of gross investment in Bangladesh: a time series evidence." eCanadian Journal of Accounting and Finance. 1 (2), pp. 20-27.
Information and communication technology, electricity consumption and economic growth in OECD countries: a panel data analysis
Salahuddin, Mohammad and Alam, Khorshed. 2016. "Information and communication technology, electricity consumption and economic growth in OECD countries: a panel data analysis." International Journal of Electrical Power and Energy Systems. 76, pp. 185-193. https://doi.org/10.1016/j.ijepes.2015.11.005
Is rapid growth in internet usage environmentally sustainable for Australia? An empirical investigation
Salahuddin, Mohammad, Alam, Khorshed and Ozturk, Ilhan. 2016. "Is rapid growth in internet usage environmentally sustainable for Australia? An empirical investigation." Environmental Science and Pollution Research. 23 (5), pp. 4700-4713. https://doi.org/10.1007/s11356-015-5689-7
Social capital formation, internet usage and economic growth in Australia: evidence from time series data
Salahuddin, Mohammad, Tisdell, Clem, Burton, Lorelle and Alam, Khorshed. 2015. "Social capital formation, internet usage and economic growth in Australia: evidence from time series data." International Journal of Economics and Financial Issues. 5 (4), pp. 942-953.
Assessing digital divide and its determinants: a case study of households’ perception in the Western Downs region of Queensland
Alam, Khorshed and Salahuddin, Mohammad. 2015. Assessing digital divide and its determinants: a case study of households’ perception in the Western Downs region of Queensland. Toowoomba, Queensland. University of Southern Queensland.
Internet usage, electricity consumption and economic growth in Australia: a time series evidence
Salahuddin, Mohammad and Alam, Khorshed. 2015. "Internet usage, electricity consumption and economic growth in Australia: a time series evidence." Telematics and Informatics. 32 (4), pp. 862-878. https://doi.org/10.1016/j.tele.2015.04.011
Economic growth, energy consumption and CO2 emissions in Gulf cooperation council countries
Salahuddin, Mohammad and Gow, Jeff. 2014. "Economic growth, energy consumption and CO2 emissions in Gulf cooperation council countries." Energy. 73, pp. 44-58. https://doi.org/10.1016/j.energy.2014.05.054
Internet usage, economic growth and financial development in Australia
Salahuddin, Mohammad and Alam, Khorshed. 2014. "Internet usage, economic growth and financial development in Australia." 2014 Econometric Society of Australasian Meeting (ESAM) and Australian Conference of Economists (ACE). Hobart, Tasmania 01 - 04 Jul 2014
Determinants of investment in Muslim developing countries: an empirical investigation
Salahuddin, Mohammad, Islam, Md. Rabiul and Salim, Syed Abdullah. 2009. "Determinants of investment in Muslim developing countries: an empirical investigation." International Journal of Economics and Management. 3 (1), pp. 100-129.
Factors affecting investment in developing countries: a panel data study
Salahuddin, Mohammad and Islam, Md. Rabiul. 2008. "Factors affecting investment in developing countries: a panel data study." Journal of Developing Areas. 42 (1), pp. 21-37.
How can we increase the quality of private schools in Bangladesh from the perspectives of students and managers?
Salahuddin, Mohammad, Islam, Rabiul, Akbar, Delwar and Raihan, Khaled Mahmud. 2008. "How can we increase the quality of private schools in Bangladesh from the perspectives of students and managers?" International Journal of Management Perspectives. 1 (2), pp. 1-14.
Saving investment correlation in South Asia - a panel approach
Wahid, Abu N. M., Salahuddin, Mohammad and Noman, Abdullah M.. 2008. "Saving investment correlation in South Asia - a panel approach ." The European Journal of Economics, Finance and Administrative Sciences.
The relationship between economic growth and remittances in the presence of cross-sectional dependance
Salahuddin, Mohammad and Gow, Jeff. 2015. "The relationship between economic growth and remittances in the presence of cross-sectional dependance." Journal of Developing Areas. 49 (1), pp. 207-221. https://doi.org/10.1353/jda.2015.0007
Feldstein-Horioka (F-H) puzzle and country-specific effects: evidence from some developing countries' panel data
Salahuddin, Mohammad and Wahid, Abu N. M.. 2012. "Feldstein-Horioka (F-H) puzzle and country-specific effects: evidence from some developing countries' panel data." Indian Economic Journal. 60 (3), pp. 138-147.
Digital divide research in Australia: a critical review
Salahuddin, Mohammad and Alam, Khorshed. 2013. "Digital divide research in Australia: a critical review." Dalziel, Paul (ed.) 37th Annual Conference of the Australia and New Zealand Regional Science Association: Regions that Work: Research, Practice and Policy. Hervey Bay, Australia 03 - 06 Dec 2013 Lincoln, New Zealand.
Empirical link between growth and remittance: evidence from panel data
Salahuddin, Mohammad. 2013. "Empirical link between growth and remittance: evidence from panel data." Journal of Applied Business and Economics. 14 (5).
Empirical link between economic growth, energy consumption and CO2 emission in Australia
Salahuddin, Mohammad and Khan, Shahjahan. 2013. "Empirical link between economic growth, energy consumption and CO2 emission in Australia." Journal of Developing Areas. 47 (2), pp. 81-92.
Factors affecting broadband penetration in OECD countries: a panel data analysis
Alam, Khorshed and Salahuddin, Mohammad. 2012. "Factors affecting broadband penetration in OECD countries: a panel data analysis." International Statistical Conference on Statistics in Planning and Development: Bangladesh Perspective (2012). Dhaka, Bangladesh 27 - 29 Dec 2012 Dhaaka, Bangladesh.
The determinants of economic growth in Pakistan: does stock market development play a major role?
Rahman, Mohammad Mafizur and Salahuddin, Mohammad. 2010. "The determinants of economic growth in Pakistan: does stock market development play a major role?" Economic Issues. 15 (2), pp. 69-86.
The determinants of economic growth in Pakistan: does stock market development play a major role?
Rahman, Mohammad Mafizur and Salahuddin, Mohammad. 2009. "The determinants of economic growth in Pakistan: does stock market development play a major role?" 38th Australian Conference of Economists (ACE 2009). Adelaide, Australia 28 - 30 Sep 2009 Adelaide, Australia.