Savings and growth nexus in the context of Southern African Customs Union countries
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | Savings and growth nexus in the context of Southern African Customs Union countries | |
| Creator | Tala, Lavisa Anyikwa, Izunna C. le Roux, Pierre | |
| Description | Orientation: The primary goal of Southern African Customs Union (SACU) is to promote economic development through regional coordination. Consequently, SACU members have set economic growth targets through various medium- and long-term policies.Research purpose: The article investigates the savings-growth nexus among SACU countries.Motivation for the study: This study is motivated by low economic growth among SACU countries and the gap in the saving-growth literature. Specifically, previous studies assumed linear relationship, thereby ignoring the fact that savings may be related to economic growth in a nonlinear fashion.Research approach/design and method: The study utilised several panel estimation techniques with data over 1990–2021 for the SACU countries.Main findings: Firstly, there is a strong evidence of long run relationship between saving and economic growth in SACU countries. Secondly, domestic saving exhibits a positive and statistically significant effect on economic growth both in the short-and long-term. Thirdly, there is evidence of non-linear relationship between domestic saving and economic growth. Lastly, it is shown that 16% threshold level of domestic savings to gross domestic product (GDP) ratio is consistent with 6% GDP growth target aspired by SACU union.Practical/managerial implications: The findings of this article suggest that domestic saving is a prerequisite for economic growth provided the funds are channelled to productive investments. Consequently, there is a need to design appropriate policies that can help to promote and mobilise savings.Contribution/value-add: This article contributes to the ongoing debate on saving-growth in the context of developing countries. In addition, it addressed the linearity assumption of the previous studies by incorporating nonlinear assumption. | |
| Publisher | AOSIS | |
| Date | 2024-02-14 | |
| Identifier | 10.4102/jef.v17i1.884 | |
| Source | Journal of Economic and Financial Sciences; Vol 17, No 1 (2024); 12 pages 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/884/1724
https://jefjournal.org.za/index.php/jef/article/view/884/1725
https://jefjournal.org.za/index.php/jef/article/view/884/1726
https://jefjournal.org.za/index.php/jef/article/view/884/1727
|
|
ADVERTISEMENT
