Purpose- Financial
innovation augment the investment alternatives of individuals, allowing them to
have different investment opportunities in changing economic conditions.
Channeling the idle savings into productive sectors increase the fund margin of
households and entrepreneurs facing financial squezee. The aim of this paper to
examine the impact of financial services on savings and domestic savings. The
paper analyzes the main determinants of savings in twenty upper middle income,
high income countries for the period of 2005-2014.
Methodology-
In this paper, we build panel data analyses to investigate the impact of
innovation in financial markets on savings and domestic savings.
Findings- Level of
financial innovation and financial access are important parameters affecting
both gross savings and gross domestic savings. higher financial innovation
leads to higher savings and domestic savings. The net interest margin and
banking crisis has a negative effect on savings in both models. Increase in
capital formation contribute to higher gross savings and gross domestic
savings.
Conclusion- The paper
finds that financial innovation and diversification is an important lever in
the increasing of savings, therefore confirming the “liberalization of
financial market” hypothesis.
Journal Section | Articles |
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Authors | |
Publication Date | June 30, 2017 |
Published in Issue | Year 2017 |
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