IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v10y2022i5p105-d805890.html
   My bibliography  Save this article

How Do the Remittance Outflows React to Economic Development in Saudi Arabia? Evidence from NARDL

Author

Listed:
  • Farea Mohammed Alharbi

    (Economics Finance Departement, College of Business Administration, Taif University, P.O. Box 11099, Taif 21944, Saudi Arabia)

Abstract

This research aims to examine the effects of remittance outflows on Saudi’s non-oil economic growth (NOGDP). While few studies have examined the effects of remittance outflows on remitting countries’ economic development, none have looked into the asymmetric impact on Saudi Arabia’s non-oil economic growth. This research fills the gaps by looking at the uneven effects of remittance outflows on Saudi NOGDP from 1990 to 2020. The empirical estimation is based on the NARDL (Nonlinear Autoregressive Distributed Lags) method. The results show that remittance outflows have a considerable positive effect on Saudi NOGDP, indicating its economic benefit. We found that the government’s current and capital expenditures have statistically significant positive impacts on NOGDP in the long and short runs. Consequently, several policy insights could be considered to maximize the effectiveness of government fiscal policy in supporting non-oil sector development. The positive effect of remittance outflows on Saudi economic growth could be the vital role of the imported high-skilled and productive labour force in developing the non-oil private sector. The positive influence of remittances on Saudi economic growth is essential for policymakers who have to undertake a unique Saudi policy to diversify the labour market and encourage local consumption and investment spending by international workers.

Suggested Citation

  • Farea Mohammed Alharbi, 2022. "How Do the Remittance Outflows React to Economic Development in Saudi Arabia? Evidence from NARDL," Economies, MDPI, vol. 10(5), pages 1-12, April.
    • Handle: RePEc:gam:jecomi:v:10:y:2022:i:5:p:105-:d:805890
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/10/5/105/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/10/5/105/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Mork, Knut Anton, 1989. "Oil and Macroeconomy When Prices Go Up and Down: An Extension of Hamilton's Results," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 740-744, June.
    3. Nusair, Salah A., 2016. "The effects of oil price shocks on the economies of the Gulf Co-operation Council countries: Nonlinear analysis," Energy Policy, Elsevier, vol. 91(C), pages 256-267.
    4. Hathroubi, Salem & Aloui, Chaker, 2016. "On interactions between remittance outflows and Saudi Arabian macroeconomy: New evidence from wavelets," Economic Modelling, Elsevier, vol. 59(C), pages 32-45.
    5. Alkhathlan, Khalid A., 2013. "The nexus between remittance outflows and growth: A study of Saudi Arabia," Economic Modelling, Elsevier, vol. 33(C), pages 695-700.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nusair, Salah A., 2019. "Oil price and inflation dynamics in the Gulf Cooperation Council countries," Energy, Elsevier, vol. 181(C), pages 997-1011.
    2. Jung, Young Cheol & Das, Anupam & McFarlane, Adian, 2020. "The asymmetric relationship between the oil price and the US-Canada exchange rate," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 198-206.
    3. Alsamara, Mouyad, 2022. "Do labor remittance outflows retard economic growth in Qatar? Evidence from nonlinear cointegration," The Quarterly Review of Economics and Finance, Elsevier, vol. 83(C), pages 1-9.
    4. Raheem, Ibrahim D., 2017. "Asymmetry and break effects of oil price -macroeconomic fundamentals dynamics: The trade effect channel," The Journal of Economic Asymmetries, Elsevier, vol. 16(C), pages 12-25.
    5. Md. Saiful Islam & Ibrahim A. Alhamad, 2023. "Do personal remittance outflows impede economic growth in Saudi Arabia? The role of trade, labor force, human, and physical capital," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-9, December.
    6. Muhammad Arshad Khan & Muhammad Iftikhar Ul Husnain & Qaisar Abbas & Syed Zulfiqar Ali Shah, 2019. "Asymmetric effects of oil price shocks on Asian economies: a nonlinear analysis," Empirical Economics, Springer, vol. 57(4), pages 1319-1350, October.
    7. Karunanithi Kriskkumar & Niaz Ahmad Mohd Naseem & Wan Ngah Wan Azman-Saini, 2022. "Investigating the Asymmetric Effect of Oil Price on the Economic Growth in Malaysia: Applying Augmented ARDL and Nonlinear ARDL Techniques," SAGE Open, , vol. 12(1), pages 21582440221, March.
    8. Liu, Donghui & Meng, Lingjie & Wang, Yudong, 2021. "The asymmetric effects of oil price changes on China’s exports: New evidence from a nonlinear autoregressive distributed lag model," Journal of Asian Economics, Elsevier, vol. 77(C).
    9. Nusair, Salah A. & Olson, Dennis, 2021. "Asymmetric oil price and Asian economies: A nonlinear ARDL approach," Energy, Elsevier, vol. 219(C).
    10. Karunanithi Kriskkumar & Niaz Ahmad Mohd Naseem, 2019. "Analysis of Oil Price Effect on Economic Growth of ASEAN Net Oil Exporters," Energies, MDPI, vol. 12(17), pages 1-19, August.
    11. Dahmani Mohamed Driouche & Attouchi Manel & Chenini Moussa & Benbouziane Mohamed, 2020. "Asymmetric Responses of Oil Price Shocks on Economic Growth in Algeria: An Empirical Analysis through NARDL Approach," Energy Economics Letters, Asian Economic and Social Society, vol. 7(2), pages 74-93, December.
    12. Rajesh H. Acharya & Anver C. Sadath, 2018. "Revisiting the relationship between oil price and macro economy: Evidence from India," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2018(1), pages 173-190.
    13. Roy, Rudra Prosad & Sinha Roy, Saikat, 2022. "Commodity futures prices pass-through and monetary policy in India: Does asymmetry matter?," The Journal of Economic Asymmetries, Elsevier, vol. 25(C).
    14. Nusair, Salah A., 2020. "The asymmetric effects of oil price changes on unemployment: Evidence from Canada and the U.S," The Journal of Economic Asymmetries, Elsevier, vol. 21(C).
    15. Raheem, Ibrahim & Olabisi, Nafisat, 2019. "What is new? The role of asymmetry and breaks in oil price–output growth volatility nexus," MPRA Paper 105361, University Library of Munich, Germany.
    16. Charfeddine, Lanouar & Barkat, Karim, 2020. "Short- and long-run asymmetric effect of oil prices and oil and gas revenues on the real GDP and economic diversification in oil-dependent economy," Energy Economics, Elsevier, vol. 86(C).
    17. Afees A. Salisu & Umar B. Ndako & Idris Adediran, 2018. "Forecasting GDP of OPEC: The role of oil price," Working Papers 044, Centre for Econometric and Allied Research, University of Ibadan.
    18. Rashid Sbia & Helmi Hamdi, 2020. "Remittances and inflation in OPEC countries:Evidence from bias-corrected least-squares dummy variable (CLSDV) estimator," Economics Bulletin, AccessEcon, vol. 40(3), pages 2471-2483.
    19. Long, Shaobo & Zhang, Rui, 2022. "The asymmetric effects of international oil prices, oil price uncertainty and income on urban residents’ consumption in China," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 789-805.
    20. Mohsen Bahmani-Oskooee & Ahmed Usman & Sana Ullah, 2023. "Asymmetric Impact of Exchange Rate Volatility on Commodity Trade Between Pakistan and China," Global Business Review, International Management Institute, vol. 24(3), pages 510-534, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:10:y:2022:i:5:p:105-:d:805890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.