The determinants of savings in Malaysia / Sri Noor Aishah Mohd Salleh

The objective of this study is to investigate the determinants of savings in Malaysia. Savings plays an important role in the economic development of a country. It is shown in growth theory that saving is a necessary element to finance investment which will enhance a country's productivity. Thus, it would be important to look at the determinants of savings such as the inflation rate, income level and age dependency ratio to fully understand the economic growth in Malaysia. Such information too will help financial institutions and policy makers in mobilizing savings as well as to increase the investment level in Malaysia. This study consists of dependent variables and independent variables. The dependent variable is national savings while the independent variables are inflation rate, income level and age dependency ratio. In this study, the secondary data were used and the information were gathered from the DataStream, World Bank, Bank Negara Malaysia and Malaysian Department of Statistics. The total amount of 30 observations were collected starting from the year 1984 to 2013. Multiple Regressions Method was used in this research as the statistical method to determine how the variables are affecting other variables. The result shows that age dependency ratio and inflation variables are statistically significant. Meanwhile, gross domestic product does not have a significant relationship with national savings.