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The Nexus between Environmental Quality, Economic Growth, and Trade Openness in Saudi Arabia (1990-2017)

Author

Listed:
  • Saida Daly

    (Department of Economics and Finance, College of Business and Economics, Qassim University, P.O. Box 6640, Buraidah 51452, Qassim, Saudi Arabia; & Department of Economics, Faculty of Economic Sciences and Management of Mahdia, University of Monastir, Monastir 5000, Tunisia,)

  • Mohamed Abdouli

    (Development Economics Laboratory, Faculty of Economics and Management of Sfax, Tunisia; & Doctoral School in Economics and Management, Faculty of Economics and Management of Sousse, Tunisia.)

Abstract

In fact, this study endeavors to explore the relationship between CO2 emissions, trade, and economic growth using the simultaneous equation for Saudi Arabia over the period 1990 2017, using the VAR model and the impulse response functions to examine the relationship between these variables. Therefore, the obtained results showed that there is evidence of a bidirectional causality between CO2 emissions and economic growth. Moreover, the feedback hypothesis between trade openness and CO2 emissions is validated. Then, the retroaction hypothesis between economic growth and trade openness is identified. Furthermore, our results indicate economic growth impede environmental quality, while our empirical results have established crucial relationships that have important policy implications. However, it is mandatory for policy makers to develop economic, environmental and outside policies to promote economic growth and trade and improve the environmental quality.

Suggested Citation

  • Saida Daly & Mohamed Abdouli, 2023. "The Nexus between Environmental Quality, Economic Growth, and Trade Openness in Saudi Arabia (1990-2017)," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 579-598, July.
  • Handle: RePEc:eco:journ2:2023-04-59
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    More about this item

    Keywords

    Economic growth; CO2 emissions; Trade openness; VAR model; Saudi Arabia;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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