Corporate Saving Behaviour

Corporate saving is one of the most significant source of funds for financing corporate growth.  It has both micro as well as macro significance.  Inspite of such dual importance of this decision problem, the theoretical determinants of corporate savings are less well established and this is an area in which very little research has been done so far.  The present work is an effort in this direction.  The main highlights of the present work in context to General Engineering Industry are: In general engineering industry, saving decision is considered as a primary decision variable in the firm’s policy framework.  Saving decision of firms is primarily governed by "profit after tax", a measure of firm’s capacity to save.  Previous year’s dividend is very often taken into account by firms as an important determinant while framing their saving policy.  Investment demand has a significant influence on the saving decision of firms.  External finance is negatively related to the saving decision of firms.  Increase in interest payment would induce firms to rely more on corporate saving.