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

Altaee, Hatem Hatef Abdulkadhım; Al-Jafari, Mohamed Khaled; Khalid, Masoud Ali

doi:10.11114/aef.v3i1.1200

Cited by 9 publications

(7 citation statements)

References 23 publications

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“…This might find its justification in the fact that most of high income developing countries enjoy high consumption level which resulted in importing final goods rather than a factor of production. This result is similar to that obtained by Altaee et al (2016), Taghavi (2012), Greenway and Hine (2003), and Raj & Chand (2017).…”

Section: Data Analysis and Resultssupporting

confidence: 81%

Export and Economic Growth Nexus in the GCC Countries: A panel Data Approach

abdulkadhim

Saeed²

2017

IJBSR

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The export and economic growth nexus, which is called Balassa's Export-Led Growth Hypothesis (ELGH) in the literature, is still an unresolved issue in both the theoretical and empirical literature. In the present study, the effect of export on economic growth in oil exporting developing countries, namely, Bahrain, Saudi Arabia, Qatar, Kuwait, UAE, and Oman in the 1990-2014 period was tested based on three models, pooled ordinary least squares (POLS), fixed effects model (FEM), and random effects model (REM) via panel data analysis. The findings revealed strong support for the "export-led growth" hypothesis. In addition, our results show that apart from growth in the labor force, investments in capital formation are necessary for economic growth. According to the obtained results, the ability to adopt technological changes in order to increase efficiency, and sustain economic development is also important.

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Section: Data Analysis and Resultssupporting

confidence: 81%

Export and Economic Growth Nexus in the GCC Countries: A panel Data Approach

abdulkadhim

Saeed²

2017

IJBSR

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“…Sun and Heshmati (2010) stated that international trade exerts a positive impact on China's economic growth, however, facing with low domestic absorptive capacity, deterioration trade conditions, the negative impact on the environment, trade friction with partners and uneven regional development. The research by Altaee et al (2016) provided ARDL and ECM to investigate the long-run and the short-run effects of trade on economic growth. The results of their study show that export has positive impact on economic growth, however, import affects real GDP growth negatively in the Kingdom of Saudi Arabia.…”

Section: Theoretical Background Of the Trade Balance Impact On Economic Growthmentioning

confidence: 99%

“…The authors used different variables to analyse the trade balance factor: trade volume as a share of GDP (Busse and Königer 2012;Fetahi-Vehapi et al 2015;Were 2015;Keho 2017), trade deficit (Abbas and Raza 2013). The import factor was used by the authors (Michelis and Zestos 2004;Awokuse 2007Awokuse , 2008Cetintas and Barisik 2008;Velnampy and Achchuthan 2013;Altaee et al 2016;Bakari and Mabrouki 2017;Bakari 2017;Bakari et al 2019aBakari et al , 2019bKumar 2020). Other authors (Michelis and Zestos 2004;Awokuse 2007Awokuse , 2008Cetintas and Barisik 2008;Awokuse and Christopoulos 2019;Sun and Heshmati 2010;Velnampy and Achchuthan 2013;Altaee et al 2016;Bakari and Mabrouki 2017;Bakari 2017;Bakari et al 2019aBakari et al , 2019b used the export variable.…”

Section: Theoretical Background Of the Trade Balance Impact On Economic Growthmentioning

confidence: 99%

“…The import factor was used by the authors (Michelis and Zestos 2004;Awokuse 2007Awokuse , 2008Cetintas and Barisik 2008;Velnampy and Achchuthan 2013;Altaee et al 2016;Bakari and Mabrouki 2017;Bakari 2017;Bakari et al 2019aBakari et al , 2019bKumar 2020). Other authors (Michelis and Zestos 2004;Awokuse 2007Awokuse , 2008Cetintas and Barisik 2008;Awokuse and Christopoulos 2019;Sun and Heshmati 2010;Velnampy and Achchuthan 2013;Altaee et al 2016;Bakari and Mabrouki 2017;Bakari 2017;Bakari et al 2019aBakari et al , 2019b used the export variable. It can be concluded that there is no clear consensus on the inclusion of independent variables in the model of trade balance effects on economic growth, as it depends on the subjective purpose of the study and the theoretical approach chosen.…”

Section: Theoretical Background Of the Trade Balance Impact On Economic Growthmentioning

confidence: 99%

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Trade Balance Effects on Economic Growth: Evidence from European Union Countries

2020

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A growing number of recent research analyse the trade balance impact on economic growth. However, ambiguous results of studies imply the need for the research as the deteriorating trade balance hinders economic growth. This research aims to investigate the impact of the trade balance on economic growth as well as to evaluate it during the periods of trade deficit. Our estimations are based on the European Union (EU) 28 countries panel data over the period of 1998–2018, using the OLS method of multivariate regression analysis with fixed effects and focusing on two strategies: (i) including all trade balance periods, and (ii) adding deficit dummy variable seeking to evaluate whether during deficit periods we can find different and significant effect on economic growth. Evaluating all trade balance periods, the obtained results indicate the negative and lagging impact of the trade balance on economic growth, and no significant differences of the impact were identified during the deficit periods. The deterioration of trade balance reduces average economic growth and from linear relationship evaluation, we can state that it does not matter whether it starts from trade deficit or surplus result. The results obtained may also obscure the possibility of a non-linear effect, which would suggest a stronger negative impact on economic growth when the trade balance deteriorates in the presence of a large trade deficit. When discussing directions for further research it would make sense to consider other factors, such as the size of the deficit and its permanence.

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“…Esmail (2015) studied growth's relationship with exports, imports, FDI, labor and oil revenue. Altaee et al (2016) established a relationship of growth with gross fixed capital formation, export, import, and financial development. Bokhari (2017) studied growth's relationship with government expenditure on education, government expenditure on health and gross fixed capital formation.…”

Section: Review Of Literaturementioning

confidence: 99%

Growth Accounting for Saudi Arabia

Haque

2019

Asian Economic and Financial Review

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Saudi Arabia is a capital and energy-intensive economy and also dependent on expatriate labor. With the recent fall in oil prices, the Kingdom is actively pursuing structural transformation. The study identifies a research gap in estimating the contribution of labor and capital to the Saudi Arabian economy. This study focuses on estimating the relative contribution of major long-term determinants of economic growth. With the support of the auto-regressive distributed lag model (ARDL), the study establishes a co-integrating relationship between real gross domestic product (GDP), investment expenditure, labor force and education expenditure in Saudi Arabia. The study notices that the maximum contribution to real GDP growth in Saudi Arabia is from the labor force. The minimum contribution to real GDP growth comes from investments in the predominant oil sector. This study identifies the mechanisms to make the localization program successful. The study recommends further diversification in productive sectors to gain benefit from new investments and suggests cutting down the unproductive expenditure in education. Contribution/ Originality:This study is one of the very few studies which have investigated the contribution of capital and labor to the economy of Saudi Arabia. In addition, by incorporating education expenditure into the model, it also studies the role of education in light of the Saudization program.The early studies of Solow (1962) on United States, Abramovitz (1956) on United States, Denison (1962) on United States & North west Europe, found that the contribution of labor is more than that of capital. However Maddisson (1970); Robinson (1971) in their respective studies on sample of developing countries found that the Asian Economic and Financial Review

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

Cited by 9 publications

References 23 publications

Export and Economic Growth Nexus in the GCC Countries: A panel Data Approach

Export and Economic Growth Nexus in the GCC Countries: A panel Data Approach

Trade Balance Effects on Economic Growth: Evidence from European Union Countries

Growth Accounting for Saudi Arabia

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