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Determinants of Economic Growth in the Kingdom of Saudi Arabia: An Application of Autoregressive Distributed Lag Model

Author

Listed:
  • Hatem Hatef Abdulkadhim Altaee
  • Mohamed Khaled Al-Jafari
  • Masoud Ali Khalid

Abstract

This paper provides an empirical analysis of the relationship between economic growth and its determinants with special focus on gross fixed capital formation, export, import, and financial development for the Kingdom of Saudi Arabia (KSA). Therefore, the study utilized an annual data from 1980 till 2014, and employed both the autoregressive distributed lag model (ARDL) and the error correction method (ECM) to investigate the long-run and the short-run parameters between the variables. The findings suggest a positive relationship between fixed capital formation, export, in one hand and economic growth in the other hand, both in the short-run and the long-run. In contrast, the financial development variable found to have a negative effect on economic growth in the short-run, however, it turned out to be positive in the long-run. Finally, the import variable showed a negative contribution to growth in the long-run as well as in the short-run. The results are consistent with the theoretical and empirical predictions.

Suggested Citation

  • Hatem Hatef Abdulkadhim Altaee & Mohamed Khaled Al-Jafari & Masoud Ali Khalid, 2016. "Determinants of Economic Growth in the Kingdom of Saudi Arabia: An Application of Autoregressive Distributed Lag Model," Applied Economics and Finance, Redfame publishing, vol. 3(1), pages 83-92, Februa.
    • Handle: RePEc:rfa:aefjnl:v:3:y:2016:i:1:p:83-92
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    Citations

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    Cited by:

    1. Amir Iqbal & Xuan Tang & Samma Faiz Rasool, 2023. "Investigating the nexus between CO2 emissions, renewable energy consumption, FDI, exports and economic growth: evidence from BRICS countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(3), pages 2234-2263, March.
    2. Sayef Bakari & Mohamed Mabrouki, 2019. "The Relationship Between Economic Growth, Exports And Imports In Morocco: An Empirical Validation Based On Var Modeling Techniques And Causality In The Meaning Of Granger," Journal of Smart Economic Growth, , vol. 4(3), pages 47-55, December.
    3. Sayef Bakari & Mohamed Mabrouki & Asma Elmakki, 2018. "The Nexus Between Industrial Exports And Economic Growth In Tunisia: Empirical Analysis," Journal of Smart Economic Growth, , vol. 3(2), pages 31-53, December.
    4. SazanTaher Saeed & Dr. Hatem HatefAbdulkadhimAltaee, 2017. "Export and Economic Growth Nexus in the GCC Countries: A panel Data Approach," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 7(12), pages 1-9, December.
    5. Mohammad Imdadul Haque, 2019. "Growth Accounting for Saudi Arabia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(6), pages 691-701, June.
    6. Sayef Bakari, 2017. "The Relationship between Export, Import, Domestic Investment and Economic Growth in Egypt: Empirical Analysis," EuroEconomica, Danubius University of Galati, issue 2(36), pages 34-43, November.
    7. repec:mth:ijafr8:v:8:y:2018:i:3:p:29-38 is not listed on IDEAS
    8. Sayef Bakari, 2017. "The Impact Of Domestic Investment On Economic Growth: New Evidence From Malaysia," Journal of Smart Economic Growth, , vol. 2(2), pages 105-121, September.
    9. Bakari, Sayef, 2017. "Why is South Africa Still a Developing Country?," MPRA Paper 80763, University Library of Munich, Germany.
    10. Deimante Blavasciunaite & Lina Garsviene & Kristina Matuzeviciute, 2020. "Trade Balance Effects on Economic Growth: Evidence from European Union Countries," Economies, MDPI, vol. 8(3), pages 1-15, July.
    11. Sayef Bakari & Mohamed Mabrouki, 2017. "Impact Of Exports And Imports On Economic Growth: New Evidence From Panama," Journal of Smart Economic Growth, , vol. 2(1), pages 67-79, March.
    12. Oziengbe Scott Aigheyisi, 2021. "Threshold Effects of Import Dependence of Economic Growth in Nigeria," ACTA VSFS, University of Finance and Administration, vol. 15(2), pages 198-219.

    More about this item

    Keywords

    Economic growth; export; import; financial development; gross fixed capital formation; autoregressive distributed lag; Kingdom of Saudi Arabia;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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