The Asymmetric Impacts of International Trade on The Rate of Economic Growth in The Kingdom of Saudi Arabia

Abstract

This study investigates the asymmetry in international trade's impact on Saudi Arabia's economic growth between 1980 and 2023. Using annual data and a nonlinear autoregressive distributed lag (NARDL) model, this paper examines the short and long run effects of these effects. The augmented Dickey-Fuller (ADF) test is used to test the stationarity of the time series data. The results show that positive effects on international trade significantly enhance economic growth in the long-run, while negative effects have no significant negative effect. Neither positive nor negative effects show a significant impact on economic growth in the short run. The results highlight the importance of international trade for sustainable economic growth. The study also uses several diagnostic tests to ensure the robustness and validity of the model. This research helps to a precise understanding of how to benefit from international trade to support the economic goals of the Kingdom of Saudi Arabia.