Determinants of Corporate Saving in Pakistan: A Macro-econometric Analysis

Firms behaviour with respect to retention and distribution of profits has received little attention in developing countries. Against the background of previous research on the subject, mainly in advanced industrial countries, the paper attempts a multivariate regression analysis of retention of profits in Pakistan, using time-series data relating to the country’s non-financial corporate sector. The results support the applicability to developing countries of many of the hypotheses concerning this aspect of firms’ behaviour which have found support in empirical research in the more advanced economies.