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Article

Financial behaviour in a cultural context: Cross-countries analysis of savings and consumption

Lyudmyla Shkvarchuk Rostyslav Slav'yuk
Abstract

This study investigated how certain aspects of national culture affect saving and consumption behaviours. The study examined the correlation between gross saving, consumption, and economic development for 38 countries, including both developed and developing ones, from different continents, with data from 1996 to 2021. The cross-countries correlation indicators differed quite a lot in 1996-2008 and somewhat levelled later in 2009-2021. The growth of financial literacy and financial inclusion of the economic agents explained such changes. The findings suggest that countries exhibiting a strong relationship between income and savings are more receptive to the tools of monetary policy. In contrast, the economies expressing a strong relationship between income and consumption are more susceptible to the tools of fiscal policy. Therefore, high correlation scores are more desirable. Cluster analysis was employed to define groups of comparable countries for evaluation of national aspects of saving and consumption behaviour. Single membership in 2- and 3-clusters were observed, but the list of countries in these clusters differed across the years. The pronounced homogeneity of the clusters indicated the absence of significant national differences in the saving and consumption behaviour of economic agents according to the selected factors of comparison. This allows using the same instruments of regulation and stabilisation of the economy in the countries that are the closest neighbours in the cluster. The study stressed the significance of including national cultural elements in the analysis of financial behaviour and the formulation of macroeconomic policy. Awareness of these cultural differences enables policymakers to adapt their strategies more effectively to enhance economic growth and stability

Keywords

saving behaviour; cultural finance; economic growth; macroeconomic policy; countries’ clustering

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Received 07.08.2024, Revised 20.10.2024, Accepted 17.12.2024

Retrieved from Vol. 11, No. 2, 2024

Suggested citation

Shkvarchuk, L., & Slav'yuk, R. (2024). Financial behaviour in a cultural context: Cross-countries analysis of savings and consumption. Economics, Entrepreneurship, Management, 11(2), 55-64. https://doi.org/10.56318/eem2024.02.055

https://doi.org/10.56318/eem2024.02.055

Pages 55-64

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