The export-economic growth nexus: The case of Saudi Arabia
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DOIhttp://dx.doi.org/10.21511/ppm.21(2).2023.70
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Article InfoVolume 21 2023, Issue #2, pp. 796-808
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Export strategies are the means by which the country can dispose of its domestic production surpluses to bridge successive deficits in national balances of payments and achieve economic growth. These strategies are of particular importance to the economy of Saudi Arabia, as it has opted in the last decade to diversify its economy and migrate gradually away from an economy heavily reliant on oil exports. Given the importance of diversifying the economy, this study aims to examine the relationship between exports and economic growth in the Saudi Arabian economy. The multivariate Granger Causality Test and cointegration, which is the most common model, was used in examining the short-term and long-term patterns of exports, non-oil exports, GDP, GDP per capita, and government spending from 1991 to 2016. The findings support a long-standing connection involving Saudi exports and the country’s rate of economic expansion. Unidirectional causality exists between exports, non-oil exports, and economic growth expansion, which means the growth rate rises as exports grow. In addition, the findings revealed the presence of bidirectional causality between the variables. Indeed, export promotion strategies are imperative to fulfill Saudi Arabia’s aspiration of robust and long-term economic growth.
Acknowledgment
The authors acknowledge the Deanship of Scientific Research at King Faisal University (KFU) in Saudi Arabia for the financial support provided under (Grant No. 186183).
- Keywords
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JEL Classification (Paper profile tab)F13, F43
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References39
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Tables11
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Figures0
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- Table 1. Description and operationalization of the variables
- Table 2. Variables descriptive values
- Table 3. Correlation matrix
- Table 4. Unit root tests using ADF and PP tests
- Table 5. Pairwise Granger causality tests among GDP, GDPC, GS, EXP, and NoEXP
- Table 6. VAR lag order selection standards
- Table 7. Johansen cointegration test (EXP, NoEXP, and GDP)
- Table 8. Johansen cointegration test (EXP, NoEXP, and GDPC)
- Table 9. Johansen cointegration test (EXP, NoEXP, and GS)
- Table 10. Toda and Yamamoto causality test
- Table 11. VAR Granger Causality/Block Exogeneity Wald tests
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