Is the impact of the Economic Diversification on Economic Growth Symmetric or Asymmetric? Evidence from Saudi Arabia

Abstract

This paper presents our investigation of the impact of economic diversification on economic growth in Saudi Arabia for the 1990-2018 period. To this end, we used linear and nonlinear error-correction models (i.e., the ARDL, Pesaran et al. (2001), and NARDL, Shin et al. (2014), models) that are suited to capture the symmetric and asymmetric effects of economic diversification on economic growth based on the Solow model. As a measure of economic diversification, we used the Herfindahl index. In the linear and the nonlinear specifications, our results show that, economic diversification has a positive effect on the economic growth only in the long term. Furthermore, using the Wald test, the symmetric hypothesis in this relationship is not rejected, indicating that economic growth responds symmetrically to positive and negative changes in economic diversification. Our results also reveal that Saudi Arabia had relative success in achieving its goal of attaining a degree of economic diversification and enhancing its economic growth.

Long-term effect of economic status on auditors' professional skepticism

“…Since this is the time when a person is most likely to establish a professional attitude, the environment in which he started his career will have an impact on his subsequent behavior. For a range of people, including economists, scientists, attorneys, investment bankers, and corporate executives, long-term events have consequences that last longer than a critical period [15]. Economic status has been linked to long-term repercussions on individuals joining the workforce.…”