Stock Market Influence on Domestic Savings in Egypt: Structural Modelling Dynamics

Faculty Commerce Year: 2024
Type of Publication: ZU Hosted Pages:
Authors:
Journal: مجلة البحوث التجارية كلية التجارة - جامعة الزقازيق Volume: 46
Keywords : Stock Market Influence , Domestic Savings , Egypt:    
Abstract:
The increasing domestic resources gap and its potential negative impacts on macroeconomic variables and economic stability in Egypt exerted significant pressure on providing necessary finance to support economic growth and achieve acceptable levels of prosperity. This raises the critical question about the role of financial markets in acting as intermediaries in aggregating domestic savings, especially the stock market. Thus, this study seeks to examine the role of the Egyptian stock exchange in mobilizing domestic savings using a structural equations model SEM and a path analysis approach through monthly data from 2015 to 2023. A system of four structural equations was constructed to investigate the role the stock market could play in mobilizing domestic savings amid the dynamics of financial markets. The study found a positive role that the stock exchange could play compared to the banking sector in mobilizing savings and the mechanism of its influence on changes in nominal and real interest rates and the inflation rate. The model incorporated the crowding-out effect that could occur in markets and the different impacts of various groups' ability to bear risks. This contributes to our understanding of financial markets and ther mechanism of influence, supporting their pivotal role in financial intermediation, leading to improved opportunities for economic growth and financial stability.
   
     
 
       

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