Bound Cointegration Test on Private Investment’s Equation: Evidence from Saudi Economy

Hassan Ghassan () and Hassan R. Alhajhoj

Applied Econometrics and International Development, 2012, vol. 12, issue 1

Abstract: This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and public investment. The results indicate that the disequilibrium is largely corrected and converges back to the equilibrium in one year and four months, with a speed of adjustment at rate of about 75 per cent a year.This result supports that the Saudi economy is resilient against the shocks.

Keywords: Private Investment; Public Investment; ARDL Cointegration; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: C22 E22 (search for similar items in EconPapers)
Date: 2012
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