Do Oil Rents Deter Foreign Direct Investment? The Case of Saudi Arabia

Haque, Mohammad Imdadul

doi:10.32479/ijeep.10359

Cited by 8 publications

(9 citation statements)

References 9 publications

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“…Furthermore, government expenditure is found to have a positive long-term effect on HDI, which is consistent with previous studies [34][35][36][37], although the level of significance is weak. According to the FMOLS results, a 1.0% increase in government expenditure has the potential to increase the HDI score by 4.09, while based on the DOLS results, it can increase the HDI score by 3.53.…”

Section: Dynamic Impactsupporting

confidence: 91%

Decrypting the Relationship Between Corruption and Human Development: Evidence from Indonesia

Hardi,

Saputra,

Hadiyani

et al. 2023

Ekon. J. Econ.

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Corruption is considered endemic in a large part of the world's population and is believed to be a factor that disrupts market behavior and distorts competition, thereby hindering economic growth and human development. This study aims to unveil the impact of corruption on Indonesia's human development through various approaches, utilizing Fully-Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), Moderated Regression Analysis (MRA), Path Analysis, and Vector Error Correction Model (VECM) methods, with data covering the period from 1995 to 2022. The results of the estimation are discussed in three parts: 1) Dynamic Impact, by analyzing the long-term direct effect of corruption on human development; 2) Indirect Impact, by examining the role of government expenditure, tax revenue, and public debt in mediating the effect of corruption on human development; and 3) Causal Impact, by determining the unidirectional and bidirectional relationships between all variables studied. The findings indicate that corruption does not have a lasting direct impact on human development. Moreover, government expenditure and public debt play a role in moderating the impact of corruption on human development. Additionally, there is no causal link between corruption and human development, whereas there are causal connections between human development, government expenditure, tax revenue, and public debt. The results of this study will be valuable in assessing the extent of corruption's impact on human development, particularly in Indonesia, and aim to raise awareness of policymakers, hence encouraging individuals to participate in combating corruption.

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Section: Dynamic Impactsupporting

confidence: 91%

Decrypting the Relationship Between Corruption and Human Development: Evidence from Indonesia

Hardi,

Saputra,

Hadiyani

et al. 2023

Ekon. J. Econ.

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“…An increase in oil rent would increase GDP in a nation. By connecting FDI, GDP, and oil rent, Haque [88] uncovered some interesting economic dynamics. More oil reserves in a nation might entice foreign investors, raising the GDP.…”

Section: Resultsmentioning

confidence: 99%

The Economic Value of Natural Resources and Its Implications for Pakistan’s Economic Growth

et al. 2022

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Natural resources and ecological services provide the foundation for manufactured capital, increasing public financing and decreasing inequality by diversifying the economy. The exploitation of natural resources is frequently the backbone of economic stability in developing and middle-income nations. As a result of their importance, natural resources need vigilant and long-term management. Recent research has tested two hypotheses, the natural resource blessing hypothesis and the natural resource curse hypothesis, on the impact of a country’s natural resources on its economy. This research is an essential contribution to the growing body of work that attempts to quantify natural resource endowments’ role in national economic growth. Investigations focus on Pakistan and span the years 1975 through 2020. Robust Least Square (RLS) estimations show that coal rents, energy use, inbound FDI, and oil rents contribute to a country’s economic growth. While consumption of renewable energy sources and industrial value-added have a detrimental effect. Natural resources, foreign direct investment, energy consumption, and industrial ecology are predicted to significantly impact economic growth during the next decade, according to the Impulse Response Function (IRF) and the Variance Decomposition Analysis (VDA). The findings may provide helpful information for academic and governmental institutions to develop natural resource management policies for sustainable development.

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“…However, these decisions' implied long-term viability are limited due to oil price volatility, thereby rejecting the reliability of long-term projections. For example, the recent increase in Saudi Arabia's oil production volume has attracted more external investors in addition to the high oil prices (Haque, 2020). The sustained demand for oil products globally undermines the significance of price volatility risks, thereby undervaluing the government's investment in other industries domestically (Alfalih & Bel Hadj, 2020).…”

Section: Resultsmentioning

confidence: 99%

Do oil prices and oil production capacity influence decision making and uncertainty in the financial market? Evidence from Saudi Arabia

Alsmadi

Alrawashdeh

Al-Gasaymeh

et al. 2022

Investment Management and Financial Innovations

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The aim of this study is to investigate the relationship between oil prices and oil production capacity and financial market performance in the Kingdom of Saudi Arabia and how oil prices and oil production capacity influence the decision making and uncertainty factors in Saudi Arabia’s financial markets. The key variables considered are oil prices and oil production capacity in the Kingdom of Saudi Arabia. Other variables such as foreign direct investment decisions and domestic investment decisions are adopted to explore their impact and reaction to the various risks identified. Therefore, data was collected from online sources to analyze qualitative and quantitative information to understand risks, uncertainties and decision-making considerations. The findings of this paper indicate that rising oil prices increase the value of the Saudi Arabian financial market. The study showed that the diversification of the investor portfolio increases the stability of Saudi Arabia’s financial market. Also, the KSA’s financial market volatility primarily reflects oil price fluctuations, and the Saudi Arabian oil production capacity directly affects its financial market performance. Saudi Arabia’s oil production was also found to pose insignificant risk to long-term economic growth and stability, thereby putting investors’ long-term investments at risk. The study also showed that investors in Saudi Arabia’s financial market fail to objectively analyze risks by focusing on short-term high-profit margins from oil prices. AcknowledgmentAll authors have contributed equally to this paper.

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Do Oil Rents Deter Foreign Direct Investment? The Case of Saudi Arabia

Cited by 8 publications

References 9 publications

Decrypting the Relationship Between Corruption and Human Development: Evidence from Indonesia

Decrypting the Relationship Between Corruption and Human Development: Evidence from Indonesia

The Economic Value of Natural Resources and Its Implications for Pakistan’s Economic Growth

Do oil prices and oil production capacity influence decision making and uncertainty in the financial market? Evidence from Saudi Arabia

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