To read this content please select one of the options below:

Determinants of savings behaviour in Saudi Arabia

Muhammad Junaid Khawaja (College of Business and Economics, Qassim University, Buraydah, Saudi Arabia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 26 December 2022




The objective of the study is to explore the determinants of savings and their relative importance in Saudi Arabia.


The stationarity of the data has been tested using augmented Dickey–Fuller (ADF) tests. Autoregressive distributed lag (ARDL) technique has been applied to establish the long run and short run relationships. Stability of savings function has been tested by applying CUSUM and CUSUMSQ techniques.


Results of ARDL identify the important factors affecting savings behaviour in Saudi Arabia. According to the results, the growth rate of GDP, the interest rate, foreign direct investment (FDI) and budget surplus positively affect savings with the last two having the most influence on domestic savings. The coefficient of the dependency ratio is negative in conformity with the theory. Similarly, the coefficient of the inflation rate is also negative.

Research limitations/implications

There is limited availability of data since only 41 years’ annual data are available.

Practical implications

In the light of the results, it is recommended that in order to increase savings, the government should adopt policies to attract FDI, increase the GDP growth rate and decrease the dependency ratio and inflation.

Social implications

Government needs to discourage larger family sizes to encourage savings in the light of the result of negative impact of the dependency ratio on savings. In order to decrease the dependency ratio, more family members especially women should be encouraged to participate in the labour market.


There is a scarcity of research for Saudi Arabia on the critical issue of determinants of domestic savings. This is a pioneering study exploring important determinants of savings in Saudi data.

Peer review

The peer review history for this article is available at



Khawaja, M.J. (2022), "Determinants of savings behaviour in Saudi Arabia", International Journal of Social Economics, Vol. ahead-of-print No. ahead-of-print.



Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

Related articles