The long-run relationship between savings and investment in oil-exporting developing countries: A case study of the Gulf Arab States

Syed Abul Basher and Stefano Fachin

MPRA Paper from University Library of Munich, Germany

Abstract: The relationship between national saving and investment over the long term is examined for six Gulf Arab oil-exporting developing countries -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. We show that, provided some large outliers are properly accounted for, long-run equilibrium relationships between saving and investment (both total and fixed) exist in these countries. Since these countries have typically large current account surpluses such relationships cannot be explained by standard arguments. Our hypothesis is that the response of investment to saving largely depends on domestic absorptive capacity.

Keywords: Saving-investment correlation; oil-exporting developing countries; GCC countries; absorptive capacity; outlier detection; integrated process. (search for similar items in EconPapers)
JEL-codes: C32 E21 E22 H54 O16 (search for similar items in EconPapers)
Date: 2011-02-17
New Economics Papers: this item is included in nep-ara and nep-cwa
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: The long-run relationship between savings and investment in oil-exporting developing countries: a case study of the Gulf Arab states (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:29077

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