The Impact of Loan to Value Ratio on Saving and Growth – Cross Country Evidence

The present study investigates the impact of LTV (loan-to-value) as well as supervisory LTV on net national saving and real GDP per capita growth in 56 countries from 2000 to 2014. The empirical result from global sample shows that LTV has significant impact on real GDP per capita growth through net national saving in pre- financial crisis. Global sample also provides evidence that in pre-financial crisis supervisory LTV and non-supervisory LTV produce different impact on net national saving. The significant impact LTV and supervisory LTV on net national saving and real GDP per capita growth are absence in post- financial crisis. However, supervisory LTV plays important role in OECD and non-high-income countries both in pre- and post- financial crisis in determining net national savings.