Financial development and economic growth in an oil-rich economy: The case of Saudi Arabia

Nahla Samargandi (), Jan Fidrmuc and Sugata Ghosh ()

Economic Modelling, 2014, vol. 43, issue C, 267-278

Abstract: We investigate the effect of financial development on economic growth in the context of Saudi Arabia, an oil-rich economy. In doing so, we distinguish between the effects of financial development on the oil and non-oil sectors of the economy. Using the Autoregressive Distributed Lag (ARDL) Bounds test technique, we find that financial development has a positive impact on the growth of the non-oil sector. In contrast, its impact on the oil-sector growth and total GDP growth is either negative or insignificant. This suggests that the relationship between financial development and growth may be fundamentally different in resource-dominated economies.

Keywords: Financial development; Economic growth; ARDL method; Oil and non-oil sectors; Saudi Arabia (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (54)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:43:y:2014:i:c:p:267-278

DOI: 10.1016/j.econmod.2014.07.042

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