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Are exports and imports of Saudi Arabia cointegrated? An empirical study

Author

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  • HAQUE, M.I.

Abstract

The objective of this study is to examine the long run cointegration between exports and imports of Saudi Arabia for the period 1968-2013. Using Johnson’s approach of cointegration this study finds that exports and imports converge towards equilibrium in the long run implying that the trade policy is being managed well as per its comparative advantage and there is both long run and short run causality running from exports to import. Importantly, this study improves upon the results of the only other study on Saudi Arabia (to the author’s best of knowledge) by including the Vector Error Correction Model (VECM). Also, this study advocates caution while using EViews6 with smaller datasets.

Suggested Citation

  • Haque, M.I., 2015. "Are exports and imports of Saudi Arabia cointegrated? An empirical study," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(1), pages 111-124.
  • Handle: RePEc:eaa:aeinde:v:15:y:2015:i:1_9
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    References listed on IDEAS

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    1. Tuck Cheong Tang, 2006. "Are Imports And Exports In The Oic Member Countries Cointegrated? A Reexamination," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 14(1), pages 49-79, December.
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    6. Husted, Steven, 1992. "The Emerging U.S. Current Account Deficit in the 1980s: A Cointegration Analysis," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 159-166, February.
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    More about this item

    Keywords

    C22; C 87; F14; 024; O53;

    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
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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