What drives local currency bond market development in Saudi Arabia: do macroeconomic and institutional factors matter?

Jamel Boukhatem ()
Additional contact information
Jamel Boukhatem: Umm Al Qura University

Future Business Journal, 2021, vol. 7, issue 1, 1-18

Abstract: Abstract The main objective of this study is to empirically determine which factors are related to the development of local-currency bond market (LCBM) in Saudi Arabia over the period 1990–2019. Using ARDL modeling, the results reveal long-run cointegrating relationships between LCBM capitalization and macroeconomic, financial, and institutional factors. Unlike institutional ones, macroeconomic and financial factors seem to matter more in developing LCBM in the short run. However, in the long run, larger economic size more government spending, low inflation levels, broader and deeper banking system, higher bureaucratic quality, and better investment profile, all play a crucial role in the determination of Saudi LCBM. Policy implications include measures toward sound macroeconomic fundamentals, broad and deep banking system, efficient stock market, and high-quality governance institutions.

Keywords: Bond market development; Macroeconomic and financial factors; Institutional framework; ARDL bounds test (search for similar items in EconPapers)
JEL-codes: C22 D53 E44 G15 O16 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1186/s43093-021-00110-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:futbus:v:7:y:2021:i:1:d:10.1186_s43093-021-00110-8

Ordering information: This journal article can be ordered from
https://fbj.springeropen.com/

DOI: 10.1186/s43093-021-00110-8

Access Statistics for this article

Future Business Journal is currently edited by Soad Kamel Rizk and Hayam Wahba

More articles in Future Business Journal from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().