Three essays on the structure of domestic savings in Türkiye

Date

2024-3

Author

Dikmen, Aytaç

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The long-term low domestic savings accompanied by widening current account deficits have resulted in the prolonged need for foreign savings in Türkiye. Chronic dependence on foreign savings is not sustainable. For a small import-dependent country like Türkiye, it comes at the expense of the high costs of foreign borrowing and the increased vulnerability to global liquidity shocks. This thesis focuses on how to increase domestic savings and substitute them for foreign savings by analyzing the empirical determinants of domestic saving rates at macro and micro levels for Türkiye. At the macro level, aggregate private saving rate determinants are investigated using the newly constructed quarterly savings data for the thesis, covering years between 1990 and 2020 in Türkiye. The econometric analyses reveal the strong unitary crowding out effect of the public saving rate on the private saving rate as well as the negative effects of the domestic debt stock and household credit rates while emphasizing the positive impacts of the corporate credit and investment rates, the real sector confidence index, the income growth rate, and the real interest rate. Micro-level analyses are based on firm-level and household budget survey data. The panel data analyses reveal that the operating profit margin is the primary determinant of the corporate saving rate for the listed companies on Borsa Istanbul during 2010-2019. The household budget survey data 2019 shows that the desired saving rate is higher than the actual saving rate for Turkish households using various econometric methods.

Subject Keywords

Determinants of savings, Türkiye, Bounds test, fixed effects, panel GLS

URI

https://hdl.handle.net/11511/108952

Collections

Graduate School of Social Sciences, Thesis