Export–growth Nexus in the Kingdom of Saudi Arabia: A Nonlinear Ardl Approach

Abstract

The study examines the asymmetric influence of exports on economic growth in the Kingdom of Saudi Arabia using an augmented neoclassical production function incorporating export earnings and oil rent. It uses time-series yearly data from 1985 to 2019 published by the World Bank, employs the nonlinear autoregressive distributed lag (NARDL) approach and Toda–Yamamoto (T–Y) Granger causality test. The outcomes reveal a long-run cointegration among economic growth, exports, oil rents and other variables. Both the exports and oil rents have unveiled asymmetric impacts on economic growth. The overall impact of exports on economic growth remains robust; its positive shock maintains neutrality, while negative shock yields affirmative influence on economic growth in the long run. Similarly, the positive components of oil rents remain neutral, while the negative shocks negatively affect economic growth, with an overall adverse impact. The T–Y causality unleashes that economic growth causes exports negative shocks, and negative shocks cause positive shocks of exports and a feedback relationship between economic growth and positive shock of exports, and thus, validates the NARDL outcomes and verifies their robustness. The outcomes imply that the Kingdom should expand its exports and enhance its nonoil output through product and market diversification measures.

Does an export‐led growth proposition exist for Bangladesh's ready‐made garments sector? A nonlinear ARDL approach

“…Moreover, the overall joint impact of LnRMGE is positive, which is validated by the sizes of coefficients and the rejection of H0: C(2) = C(3) = C(4) = C(5) = 0. The outcomes indicate that an increase in the value of RMG export income is likely to boost EG in Bangladesh.The findings validate the RMG ELG proposition for Bangladesh and acknowledge the previous similar outcomes ofAl-Mamun and Nath (2005), Paul (2014),Tang et al (2015),Islam et al (2016),Chia (2016),Ali and Li (2018),Aslan and Topcu (2018),Athanasia and Emmanuel (2018),Islam (2021a),Athanasia and Trevor (2020),Islam (2021b), andIslam et al (2022), who documented a constructive contribution of the export earnings to the economic expansion and contradicts withIslam and Mirza (2013) who found the growth-led export proposition valid for Bangladesh.The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) envisioned a target of 50 billion US dollars in export earnings by the fiftieth anniversary of Bangladesh's establishment in 2021. The vision was declared at the Bangladesh RMG 2021-50 billion USD in 50 Years event held between December 7-9, 2014, in Dhaka.…”

“…The findings validate the RMG ELG proposition for Bangladesh and acknowledge the previous similar outcomes of Al‐Mamun and Nath (2005), Paul (2014), Tang et al (2015), Islam et al (2016), Chia (2016), Ali and Li (2018), Aslan and Topcu (2018), Athanasia and Emmanuel (2018), Islam (2021a), Athanasia and Trevor (2020), Islam (2021b), and Islam et al (2022), who documented a constructive contribution of the export earnings to the economic expansion and contradicts with Islam and Mirza (2013) who found the growth‐led export proposition valid for Bangladesh.…”

“…The study revealed the positive influence of open trade on economic expansion both in the long and short term, and the trade‐led growth proposition was authenticated. In a recent study, Islam et al (2022) employed the nonlinear ARDL approach to investigate the asymmetric influence of export income on EG in Saudi Arabia. They utilized annual data from 1985 to 2019 and found a cointegrating relationship among EG, export income, and other variables, and further reported that export income exerted an asymmetric influence on EG growth with a robust and positive influence on the latter in the long run.…”

The Impact of Export and FDI on the Economic Growth Rate in India: An ARDL Bound Testing Approach

“…Pahlavani, Wilson, & Worthington [15] used this model to understand the trade and GDP nexus in Iran, Islam, Saif, & AlShammari [16] exportgrowth nexus in Kingdom of Saudi Arabia. This technique has been employed in researches that involve issues related to financial markets that explore relationship between oil prices, exchange rate, and stock prices [17], exchange rates and stock prices [18] and long run demand for money [19].…”

Opportunities for Pakistan’s Exports Growth through OBOR: Case of Central Asian Republics

“…The analysis supports a long-term association between export growth and economic growth in eight nations. Additionally, Islam et al (2022) use the NARDL approach to economic growth to analyze the asymmetric impact of exports on economic growth in the Kingdom of Saudi Arabia, resulting in a positive shock from exports. Also, in a manner similar to this, Hailin and Xiao (2010) investigate the relationships between exports and productivity growth in Asian nations.…”