Trade Openness, Government Consumption, and Economic Growth Nexus in Saudi Arabia: ARDL Cointegration Approach

This study intends to examine the influence of trade openness on economic growth in Kingdom Saudi Arabia including government consumption and labor force as control variables. Using time-series yearly data from 1985 2019, applies Auto-Regressive Distributed Lag (ARDL) cointegration regression Toda-Yamamoto (T-Y) Granger causality check achieve objective study. The ARDL model estimation discloses positive contribution short long run well; causes positively short-run, while its impact is insignificant run. T-Y test outcomes have demonstrated several bidirectional unidirectional causalities. There are three feedback relations; “trade openness-economic growth,” “economic growth-government consumption,” “government consumption-labor forces.” Three an equal number causalities; “labor forces openness,” consumption.” implications for policymaker boost Kingdom’s benefit further trade, rationalize government’s size promote private sector raise latter’s effective GDP, accelerate income growth.