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The Impact of Financing on Economic Growth in Saudi Arabia

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  • Mohammed AL Mahish

Abstract

This paper investigates the impact of the overall financing activities on economic growth in Saudi Arabia. The study developed a financing index that takes into account the overall available credit in Saudi Arabia. The index was shown to be sensitive to economic and political shocks such as the Arab Spring. Using Johnson cointegration approach, the paper found an evidence of long run relationship between real GDP per capita, financing, real interest real, public labor force, and capital. Using a vector error correction model, the paper found a robust estimate that proves the positive impact of financing on economic growth in Saudi Arabia. Furthermore, Granger-Causality Wald test indicates that financing influences economic growth in Saudi Arabia.

Suggested Citation

  • Mohammed AL Mahish, 2016. "The Impact of Financing on Economic Growth in Saudi Arabia," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(8), pages 1-1, August.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:8:p:1
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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