The impact of fiscal policy on non-oil GDP in Saudi Arabia

Hasanov, Fakhri; AlKathiri, Nader; Alshahrani, Saad A.; Alyamani, Ryan

doi:10.1080/00036846.2021.1966370

Cited by 12 publications

(5 citation statements)

References 56 publications

(54 reference statements)

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“…Tis indicates that variables have a positive impact on nonoil economic growth. Our fndings support most studies that found a considerably favorable efect of fnancial innovation on nonoil economic growth in Saudi Arabia [31,82,83,87]. Tus, fnancial innovation promotes nonoil economic development by hastening the accumulation of capital, facilitating fnancial intermediation, and improving payment methods.…”

supporting

confidence: 86%

“…Tus, fnancial innovation promotes nonoil economic development by hastening the accumulation of capital, facilitating fnancial intermediation, and improving payment methods. Moreover, the fndings of this paper are similar to most empirical studies that found that the non-oil trade has a signifcant efect on the economic growth and GDP [87,88]. Tus, nonoil trade openness promotes nonoil economic development by importing new technology, ideas, and information in addition to buying and selling products and services.…”

supporting

confidence: 78%

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Investigating Interaction Dynamics among Nonoil Economic Growth and Its Most Important Determinants: Evidence from Saudi Arabia

Al-Abdi,

Badr,

Ali

et al. 2023

Discrete Dynamics in Nature and Society

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Over the past decades, Saudi Arabia’s economic development has strongly depended on oil revenues fueled by the rise of oil prices and the strong global market demands for crude oils. However, the country can no longer depend on oil revenues in the face of the dynamic global market, and hence, the Saudi government’s Vision 2030 seeks to reduce this dependence and diversify the economy’s sources of income. Motivated by this, this study aims to investigate the impact of growth factors: financial innovation (FI), nonoil trade openness (TO), nonoil gross capital formation (GCF), and human capital (CH) development on the nonoil economic growth in Saudi Arabia. The goal of this investigation is to examine the dynamic symmetrical and nonsymmetrical impact of these growth factors on nonoil economic growth and policymaking in Saudi Arabia. To achieve this, this study utilizes the distributed lag symmetric and asymmetric (ARDL and NARD) approaches to assess the short- and long-term symmetric relationships among these growth variables with nonoil economic growth as well as the stationarity, cointegration, and directionality among variables with the theory of “ceteris paribus” in the error correction model (ECM), and Granger causality framework to analyze time-series data from 1980 to 2020. The findings of this study revealed that the FI, TO, GCF, and CH have an impact on the nonoil economic growth in the short and long terms. Additionally, in the long term, the NARDL technique showed that the positive adjustments of HC, FI, TO, and GCF boost the development, which have very significant effects on the nonoil GDP. They also indicate that negative movements have more influence than positive movements in FI. Meanwhile, mixed directional causation results were observed in the short-run analyses. Overall, the findings of this study provide significant insights, empirical recommendations, and implications for policymakers striving to achieve sustainable nonoil trade economic growth in Saudi Arabia and the region.

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supporting

confidence: 86%

supporting

confidence: 78%

Investigating Interaction Dynamics among Nonoil Economic Growth and Its Most Important Determinants: Evidence from Saudi Arabia

Al-Abdi,

Badr,

Ali

et al. 2023

Discrete Dynamics in Nature and Society

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“…Several references have discussed this policy update, Hasanov et al (2022) and Brini and Jemmali (2016).…”

Section: Policies' Strength and The Efficiency Of Government Spendingmentioning

confidence: 99%

Public spending efficiency in the countries of the gulf cooperation council

Asiri

2024

JMB

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PurposeThe Gulf Cooperation Council (GCC) countries have been increasingly investing in their economic and social development in recent years, yet the effectiveness of their spending remains unknown although they have been taking reforms to advance their spending efficiency practices.Design/methodology/approachThe study applies a quantitative approach to analyze panel data using a multiple regression model based on the World Economic Forum (WEF) reports of the global competitiveness index (GCI) from 2009 until 2018.FindingsThe results show that policies' strength has a positive and significant influence, while national infrastructure and workforce empowerment have a negative and significant influence over the extent of spending efficiency implementation in the GCC countries.Research limitations/implicationsGCI disclosure assessment criteria changed in 2019 and then stopped in 2020 due to COVID-19. A different version of GCI was published in 2020, which focuses on recovering from the COVID-19 pandemic, and no other issues have been published since then. This represented a barrier to recent data collection.Practical implicationsPractical contribution is the value added by this study to a minimal literature on spending efficiency in the GCC countries. This study’s theoretical contribution to knowledge is the integration of the new institutional sociology (NIS) perspective of institutional theory and the resource slack theory to investigate a set of factors rarely explored in relation to their impact on governmental spending efficiency.Social implicationsThis study provides the following recommendations for policymakers: The GCC government should direct government training bodies and universities (in business majors) to include mandatory spending efficiency subjects to enhance current knowledge. Also, the governmental-related bodies of spending efficiency should make agreements with universities and research centers to improve the diverse R&D aspects of government spending efficiency. Another important recommendation is to enforce the adoption of the GRC concept regarding spending efficiency practices for governmental employees to guide them towards implementing spending efficiency practices.Originality/valueThis study's theoretical contribution to knowledge is the integration of the new institutional sociology (NIS) perspective of institutional theory and the resource slack theory to investigate a set of factors rarely explored in relation to their impact on governmental spending efficiency. Also, the practical contribution is the value added by this study to a minimal literature on spending efficiency in the GCC countries. The research has established empirical evidence to support the findings above.

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“…Second, a large portion of Saudi Arabia's government revenues come from oil exports (see, e.g., [113,116]). Government consumption, again regardless of how it is measured, has a considerable positive effect on the Saudi CPI, which is the numerator in the REER formula, as described in the Data section.…”

Section: Appendix B Conceptual Framework For Modeling the Saudi Reermentioning

confidence: 99%

Oil and Non-Oil Determinants of Saudi Arabia’s International Competitiveness: Historical Analysis and Policy Simulations

Hasanov

Razek

2023

Sustainability

Self Cite

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To achieve sustainable economic growth, Saudi Vision 2030’s target is to improve Saudi Arabia’s ranking on the Global Competitiveness Index from 25 in 2015–2016 to within the top 10 by 2030. Saudi Arabia also aims to increase the share of non-oil exports in the non-oil GDP from 16% in 2016 to 50% by 2030. For policymakers to make informed decisions to achieve these goals, they need to understand the driving forces of Saudi Arabia’s competitiveness. To this end, we consider the real effective exchange rate (REER) as a measure of external price competitiveness, as it captures domestic and global price changes. We then examine the REER using a two-stage modeling framework. First, we estimate the REER equation, which allows us to assess the impacts of the determinants and evaluate currency misalignments as a competitiveness indicator. Second, we extend the KAPSARC Global Energy Macroeconometric Model (KGEMM) with the estimated equation, which provides a framework for simulating the competitiveness impacts of the theoretically formulated determinants and other variables relevant to policymakers. The framework also allows us to account for feedback loops. We conduct a policy scenario analysis to quantify the competitiveness effects of the Public Investment Fund’s (PIF) new strategy for 2021–2025. We derive the following policy insights. Authorities may wish to implement initiatives boosting future productivity and, thus, competitiveness, such as PIF investments. Policymakers should be regularly informed about currency misalignment. Government consumption and public investment projects should consider substituting imports with locally produced goods and services. Local content development would also help to diversify the Saudi economy. Finally, attracting more foreign investment and other assets from the rest of the world may lead to technological development and improvement in the economic, financial, and social infrastructure and business environment, all enhancing competitiveness.

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The impact of fiscal policy on non-oil GDP in Saudi Arabia

Cited by 12 publications

References 56 publications

Investigating Interaction Dynamics among Nonoil Economic Growth and Its Most Important Determinants: Evidence from Saudi Arabia

Investigating Interaction Dynamics among Nonoil Economic Growth and Its Most Important Determinants: Evidence from Saudi Arabia

Public spending efficiency in the countries of the gulf cooperation council

Oil and Non-Oil Determinants of Saudi Arabia’s International Competitiveness: Historical Analysis and Policy Simulations

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