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Oil Exports and Economic Growth: An Empirical Evidence from Saudi Arabia

Author

Listed:
  • Zafar Ahmad Sultan

    (Department of Economics; L.S. College, Muzaffarpur; B.R.A. Bihar University, Muzaffarpur; Bihar, India)

  • Mohammad Imdadul Haque

    (College of Business Administration, Prince Sattam Bin Abdulaziz University, Saudi Arabia)

Abstract

Being oil-based economy, the economic prosperity of Saudi Arabia to a large extent depends upon international price of crude oil. Since substantial portion of government revenue and foreign exchange which determine the economic activities of the government and fulfill the import requirements of the country comes from oil exports, any disturbance in this sector is likely to affect entire economy of Saudi Arabia. The paper applied Johansen cointegration method and vector error correction model (VECM) to estimate long run relationship of economic growth with oil exports, imports and government consumption expenditure. The study has found that economic growth has long run relationship with oil exports, imports and consumption expenditure of the government. The study recommends monitoring and regulating imports and intensive efforts to diversify economic base in exports as well as import substituting industries of the country.

Suggested Citation

  • Zafar Ahmad Sultan & Mohammad Imdadul Haque, 2018. "Oil Exports and Economic Growth: An Empirical Evidence from Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 281-287.
    • Handle: RePEc:eco:journ2:2018-05-35
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    Citations

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    Cited by:

    1. Abdulaziz A. Alotaibi, 2019. "Budget Policies During and After the Oil Crisis of 2014: Comparative Analysis of Saudi Arabia, UAE, and Kuwait," International Business Research, Canadian Center of Science and Education, vol. 12(6), pages 23-28, June.
    2. Sami Alabdulwahab, 2021. "The Linkage between Oil and Non-Oil GDP in Saudi Arabia," Economies, MDPI, vol. 9(4), pages 1-21, December.
    3. Sugra Humbatova & Afag Huseyn & Natig Gadim-Oglu Hajiyev, 2023. "Impact of Oil Factor on Investment: The Case of Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 129-148, March.
    4. Sugra Humbatova, 2023. "The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 189-212, January.
    5. Abdul Rahman, 2020. "Long run Association of Stock Prices and Crude Oil Prices: Evidence from Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 124-131.
    6. Anis Ali, 2021. "Volatility of Oil Prices and Public Spending in Saudi Arabia: Sensitivity and Trend Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 165-172.
    7. Anis Ali, 2020. "Financial performance, disparity, and trend of petrochemicals sector of Saudi Arabia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 809-824, September.

    More about this item

    Keywords

    Oil Export; Economic Growth; Causality; Saudi Arabia;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East

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