scholarly journals Does the Vision 2030 and Value Added Tax Leads to Sustainable Economic Growth: The Case of Saudi Arabia?

2021 ◽  
Vol 13 (19) ◽  
pp. 11090
Author(s):  
Suleman Sarwar ◽  
Dalia Streimikiene ◽  
Rida Waheed ◽  
Ashwag Dignah ◽  
Asta Mikalauskiene
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Financial Development ◽  
Trade Openness ◽  
Value Added ◽  
Economic Transformation ◽  
Policy Implications ◽  
Value Added Tax ◽  
Vision 2030 ◽  
The Impact

The motivation behind the current research is to check the effect of the recent introduction of value added tax (VAT) and Vision 2030 on the economy of Saudi Arabia. To check this, those variables are added to the analysis which contribute to economic development including labor, capital, oil price, financial development, and trade openness to examine that how economic transformation affects the role of these variables in economic growth. According to the vector error correction (VEC) model, the impact of labor becomes negative after VAT, however, the impact of capital and financial development becomes significant by this transformation. The coefficients of oil prices, for positive and negative shocks, are significant and negative. Financial development and trade openness are reporting surprising results; positive shocks have shown negative coefficients. However, after Vision 2030, trade openness has a significant and positive coefficient. Policy implications include diversification of exports, reviving the private financing mechanism and restructuring the export/import policies.

scholarly journals The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 174
Author(s):  
Khalid Eltayeb Elfaki ◽  
Rossanto Dwi Handoyo ◽  
Kabiru Hannafi Ibrahim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Financial Development ◽  
Correction Term ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

scholarly journals The Relation between Tourism and Economic Growth: A Case of Saudi Arabia as an Emerging Tourism Destination

2020 ◽  
Vol 3 (4) ◽  
pp. 29-47
Author(s):  
Lamia Jamel
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Granger Causality ◽  
Co2 Emissions ◽  
Financial Development ◽  
Positive Impact ◽  
Trade Openness ◽  
Granger Causality Test ◽  
Annual Data ◽  
Causality Test

This paper examines empirically the relation between tourism and economic growth in Saudi Arabia. The authors try to justify how tourism contributes to the economic growth of Saudi Arabia. There are applied descriptive statistics, unit root test, VAR model and Granger Causality test as an econometric methodology to examine the connection between tourism and economic growth in Saudi Arabia for the annual data in the period from 1990 to 2018. The main empirical results of the study find out that tourism affects positively the economic growth in Saudi Arabia. Also, there is found a positive nexus among tourism and economic growth. Furthermore, CO2 emissions and financial development impact positively the tourism sector, while trade openness predicts a negative effect on tourism. Additionally, CO2 emissions, financial development, and trade openness have a positive impact on economic growth in Saudi Arabia. Finally, the Granger causality test provides evidence of bidirectional nexus between tourism and economic growth in Saudi Arabia. This paper contributes to the current research by explaining the causal nexus among tourism and economic growth in Saudi Arabia during the period from 1990 to 2018, applying a vector autoregressive model and Granger Causality.

Trade Openness, Financial Development Index and Economic Growth

2014 ◽  
Vol 6 (4) ◽  
pp. 362-375 ◽  
Author(s):  
Dogga Satyanarayana Murthy ◽  
Suresh Kumar Patra ◽  
Amaresh Samantaraya
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Trade Openness ◽  
Output Growth ◽  
Domestic Demand ◽  
Policy Implications ◽  
Content Type ◽  
Development Index ◽  
Long Run ◽  
Financial Development Index

Purpose – The purpose of this article is to examine the inter-relationship and direction of causality among three macroeconomic variables such as trade liberalization, financial development and economic growth. Design/methodology/approach – The empirical analysis is based on the principal component analysis as method to construct financial development index (FDI), augmented Dickey–Fuller and Phillips–Perron tests as the unit root test, Johansen’s co-integration test and VECM for direction of causality in the long run among TOP, FDI and economic growth. Findings – The empirical results confirmed that there exists a long-run association among trade openness, financial development and economic growth. This study has also found that there is bidirectional causality between financial development and growth. However, the causality runs from growth to finance is stronger than that from finance to growth. This study also observed unidirectional causality that runs from financial development and economic growth to trade openness. Research limitations/implications – The policy implications that could be drawn from the present study is that, initiation of financial reforms to improve the size of financial system would lead to higher economic growth. Another key implication from this study is that because trade openness has no effect on both domestic financial sector development and output growth, it would be better to deploy the resources into creating a sustained domestic demand rather than concentrating more on the external front in general and trade openness in particular. Originality/value – The study constructs a summary IFD for India by taking into account four broad financial development indicators for the period 1971-2012. The present paper also suggests that it would be better to deploy the resources to create a sustained domestic demand rather than concentrating more on the external front in general and trade openness in particular.

scholarly journals The Links between Energy Consumption, Financial Development, and Economic Growth in Lebanon: Evidence from Cointegration with Unknown Structural Breaks

2015 ◽  
Vol 2015 ◽  
pp. 1-15 ◽  
Author(s):  
Salah Abosedra ◽  
Muhammad Shahbaz ◽  
Rashid Sbia
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Structural Breaks ◽  
Banking Sector ◽  
Oil And Gas ◽  
Vital Role ◽  
Policy Implications ◽  
Service Oriented ◽  
The Impact

We investigate the relation between financial development, energy consumption, and economic growth in the economy of Lebanon over the period 2000M2–2010M12. Our findings confirm the existence of cointegration among the variables. The results indicate that financial development and energy consumption contribute to economic growth in Lebanon. The impact of energy consumption on economic growth is positive showing the significance of energy as a main stimulant of economic growth. Financial development is also found to play a vital role in enhancing economic growth. Financial development and economic growth also result in further increase in energy consumption. We offer some policy implications specific to Lebanon considering the recent discovery of large oil and gas reserves in the country and the historical importance of its banking sector which remains a center of Lebanon’s service-oriented economy.

scholarly journals Role of institutional quality in economic development: A case study of Asian countries

2021 ◽  
Vol 19 (2) ◽  
pp. 357-369
Author(s):  
Oanh Kim Thi Tran ◽  
Hac Dinh Le ◽  
Anh Hong Viet Nguyen
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Trade Openness ◽  
Institutional Quality ◽  
Policy Implications ◽  
Asian Countries ◽  
Regression Methods ◽  
Key Factor ◽  
The Impact

The paper investigates the impact of institutional quality on economic growth by taking 48 countries in Asia between 2005 and 2018. By using the quantile regression methods with panel data, institutional quality is found to be a key factor of economic development. However, in the lower-income Asian countries, the institution with better quality appears to promote the growth more effectively than in the higher-income ones. Moreover, the paper also finds out a nonlinear relationship between institutions and economic growth. The results show that there is an institutional threshold for economic growth to reach its highest level. If the institution indicator exceeds the threshold, it causes the reverse effect on the growth. Moreover, the economic growth of Asian countries is also affected by inflation (INF), labor force (LABO), trade openness (OPEN), and infrastructure (TELE). From that, the study suggests some policy implications for Asian countries and Vietnam, in particular, in order to improve institutions contributing to economic growth.

scholarly journals THE IMPACT OF STANDARD VALUE ADDED TAX ON ECONOMIC GROWTH IN CEE-5 COUNTRIES: ECONOMETRIC ANALYSIS AND SIMULATIONS

2016 ◽  
Vol 22 (6) ◽  
pp. 850-866 ◽  
Author(s):  
Mihaela SIMIONESCU ◽  
Lucian-Liviu ALBU
Keyword(s):  
Economic Growth ◽  
Linear Models ◽  
Random Effect ◽  
Random Effect Model ◽  
Value Added ◽  
Positive Influence ◽  
Value Added Tax ◽  
Short Run ◽  
The Impact ◽  
Panel Vector Autoregression

The value added tax (VAT), as an instrument of fiscal policy, might have an important role on economic growth. This study analyzes the impact of standard VAT rate on economic growth in five Central and Eastern European countries (CEE-5) (Bulgaria, Czech Republic, Hungary, Poland and Romania). Different types of panel data models (random effect model, dynamic panel and panel vector-autoregression) over 1995–2015 indicated a positive influence of VAT rate on economic growth. There is a bilateral Granger causality between economic growth and VAT rate. The Bayesian linear models indicate a positive effect of VAT rate on GDP rate only for Hungary. On short-run, the other countries register lower GDP rates when VAT rates increase. Some simulations of economic growth for 2016 and 2018 were made for each CEE-5 country under different assumptions regarding VAT rate values.

scholarly journals Modelling Energy Consumption, Carbon Dioxide Emissions and Economic Growth Nexus in Ethiopia: Evidence from Cointegration and Causality Analysis

2018 ◽  
Vol 6 (6) ◽  
pp. 699 ◽  
Author(s):  
Shemelis Kebede Hundie
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Financial Development ◽  
Environmental Sustainability ◽  
Carbon Dioxide Emissions ◽  
Positive Impact ◽  
Trade Openness ◽  
Causality Analysis ◽  
The Impact

Policy makers need to know the relationship among energy use, economic growth and environmental quality in order to formulate rigorous policy for economic growth and environmental sustainability. This study analyzes the nexus among energy consumption, affluence, financial development, trade openness, urbanization, population and CO2 emissions in Ethiopia using data from 1970–2014. The ARDL cointegration results show that cointegration exists among the variables. Energy consumption, population, trade openness and economic growth have positive impact on CO2 in the long-run while economic growth squared reduces CO2 emissions which confirms that the EKC hypothesis holds in Ethiopia. In the short-run urbanization and energy consumption intensify environmental degradation. Toda-Yamamoto granger causality results indicate the bi-directional causality between energy consumption and CO2 emissions, CO2 emissions and urbanization. Financial development, population and urbanization cause economic growth while economic growth causes CO2 emissions. Causality runs from energy consumption to financial development, urbanization and population which in turn cause economic growth. From the result, CO2 emissions extenuation policy in Ethiopia should focus on environmentally friendly growth, enhancing consumption of cleaner energy, incorporating the impact of population, urbanization, trade and financial development.

scholarly journals Capital Inflows, Financial Development and Growth in Ecowas Countries: A New Empirical Insight

2021 ◽  
Author(s):  
Anthony Orji ◽  
Jonathan E. Ogbuabor ◽  
Chiamaka F. Okolomike ◽  
Onyinye I. Anthony-Orji
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Labour Force ◽  
Trade Openness ◽  
Capital Inflows ◽  
Data Series ◽  
Financial Deepening ◽  
Foreign Capital Inflows ◽  
The Government ◽  
The Impact

Abstract This paper empirically investigated the impact of foreign capital inflows and financial development on economic growth in ECOWAS countries. The study made use of quarterly data series from 2000 to 2017 for the analysis. Adopting the panel fixed-effect regression, the empirical results showed that Foreign Direct Investment (FDI), net domestic credit (CRE), Gross Capital Formation (GCF), and Foreign Aid (AID) increase economic growth in ECOWAS region while labour force (LF) and Trade Openness (OPEN) revealed otherwise. The study therefore recommended that concerned policy makers in the ECOWAS region should pursue financial deepening and strengthen policies that will enhance the operations of the financial system. Also member countries should create a conducive socio-political and economic environment for foreign investors to invest in the economies. This can be done by reducing the corruption prevalent in the system, ethnic unrest, introduction of tax holidays, stability of policies introduced by the government, among others. In this era of Covid-19 many have lost their jobs and the economy of ECOWAS needs to be revitalized by following these economic prescriptions, among others.JEL Classification: F21; F36; F38; F43; G15; O16

scholarly journals The Value-Added Tax (VAT): Effects on Saudi Economy in The Light of The Saudi Vision 2030

2020 ◽  
pp. 201-214
Author(s):  
Ghadeer Amer Albishi ◽  
Muneerah Alshabanah
Keyword(s):  
Literature Review ◽  
Value Added ◽  
Tax Burden ◽  
Purchasing Power ◽  
Value Added Tax ◽  
Government Services ◽  
Tax Revenues ◽  
Vision 2030 ◽  
The Impact ◽  
Technical Regulations

The aim of this study is to know the impact of Value-added Tax imposition on Saudi economy in light of the Saudi Vision 2030, we assumed that the Value-added Tax leads to an increase in general revenues, and it affects the purchasing power, we also assumed that the provision of subsidies lowers the tax burden. This study follows the descriptive methodology in the literature review and the analytical-inductive methodology in collecting data to examine the assumptions by using a questionnaire. This research generally discussed taxes by reviewing its definitions, characteristics, and objectives, it also mentioned the technical regulations of taxation and analyzed the questionnaire results and estimated the Value-added tax revenues contribution in general revenues. The main conclusions were that the Value-added tax imposition leads to an increase in prices which in turn decreases the purchasing power, also the revenues from the Value-added Tax contributed in increasing general revenues, and the most important recommendations were to establish rules on commercial institutions to prevent prices manipulation after the tax is implemented. In addition, this research recommended directing Value-added tax revenues for infrastructure spending and improving government services.

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