EconPapers    
Economics at your fingertips  
 

Inclusive Finance, Growth and Socio-Economic Development in Saudi Arabia: A Threshold Cointegration Approach

Salem Hathroubi ()
Additional contact information
Salem Hathroubi: Al-Imam Muhammad Ibn Saud Islamic University

Journal of Economic Development, 2019, vol. 44, issue 2, 77-111

Abstract: Empirical literature argues that financial inclusion has positive impact on growth, reduce inequality and poverty. This paper has twofold. First, it aims to provide a measurement of financial inclusion in the Kingdom of Saudi Arabia (KSA) as an oil-rich economy during the period 1980-2016 by the construction of a comprehensive index. Second, we study the incidence of financial inclusion on growth and human development through a set of socioeconomic leading variables. Using GMM methodology, our results suggest that financial inclusion is highly and positively correlated to human development index, and to employed share of adult population. Conversely, financial inclusion is insignificantly negatively correlated to per capita real GDP and highly negatively correlated to the share of rural population and to the share of women in adult population. In this study we take in consideration the non-linearity between inclusive finance, economic growth and human development by performing threshold cointegration and Granger-causality tests. Our findings show that there is non-linear causal relationship between financial inclusion, human development and economic growth in the long-run while in the short-run neither financial inclusion nor economic growth Granger-causes each other. This result is in concordance with previous empirical studies in the case of oil-based economies. Our findings could help policy-makers and regulators in KSA to design an inclusive financial sector taking into account the specificities of the Saudi economy.

Keywords: Inclusive Finance; Economic Growth; Human Development; Threshold-cointegration; TVECM; TGC (search for similar items in EconPapers)
JEL-codes: G21 O16 O50 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://jed.or.kr/full-text/44-2/4.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:44:y:2019:i:2:p:77-111

Access Statistics for this article

Journal of Economic Development is currently edited by Sung Y. Park

More articles in Journal of Economic Development from Chung-Ang Unviersity, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sung Y. Park ().

 
Page updated 2019-08-03
Handle: RePEc:jed:journl:v:44:y:2019:i:2:p:77-111