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Financial development and economic growth in an oil-rich economy: The case of Saudi Arabia

Listed author(s):
  • Samargandi, Nahla
  • Fidrmuc, Jan
  • Ghosh, Sugata

We investigate the effect of financial development on economic growth in the context of Saudi Arabia, an oil-rich economy. In doing so, we distinguish between the effects of financial development on the oil and non-oil sectors of the economy. Using the Autoregressive Distributed Lag (ARDL) Bounds test technique, we find that financial development has a positive impact on the growth of the non-oil sector. In contrast, its impact on the oil-sector growth and total GDP growth is either negative or insignificant. This suggests that the relationship between financial development and growth may be fundamentally different in resource-dominated economies.

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File URL: http://www.sciencedirect.com/science/article/pii/S0264999314002983
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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 43 (2014)
Issue (Month): C ()
Pages: 267-278

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Handle: RePEc:eee:ecmode:v:43:y:2014:i:c:p:267-278
DOI: 10.1016/j.econmod.2014.07.042
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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