Economic Growth In GCC Countries Research Articles

Impact of energy intensity, green economy and blue economy to achieve sustainable economic growth in GCC countries: Does Saudi Vision 2030 matters to GCC countries

The study examines the role of energy intensity, green economic factors, and blue economic factors to achieve sustainable economic growth in gulf countries. Additionally, we analyze the role of studied factors in view of Saudi Vision 2030. The findings of asymmetric ARDL report that labor and marine trade are the contributing factors of economic growth in gulf countries. However, the factors have improved in post-Vision 2030 estimations. The negative shocks in energy intensity leads towards sustainable economic growth. The positive shocks in renewable energy, grants, marine trade, and marine tourism are key factors for economic development. In country wide analysis, we recommend gulf countries need to widely focus on green and blue economic factors. For green indicators, research and innovation need extensive reforms to participate in sustainable economic development. In reviewing of the blue factors, we recommend reforms in fishery and marine tourism sectors.

The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries

This paper investigates the impact of corruption on economic growth and investments in the Gulf Cooperation Council countries over the period 2003 to 2016 using the panel vector error correction model and the panel fully modified ordinary least squares method developed by Pedroni. We find that there is at least one cointegration relationship between the variables. The results of Granger causality tests indicate that corruption does not cause economic growth, foreign and domestic investments in the short run. Moreover, we find that there is strong long run unidirectional causality running from corruption to economic growth, foreign direct investment, domestic investment, and domestic credit. Estimation of the panel fully modified ordinary least squares model indicates that corruption has a negative impact on economic growth whereas a positive influence on domestic investment. Hence, the policy implication resulting from this study is that the improvement of corruption perception index in Gulf Cooperation Council countries is not without a positive impact on economic growth in the long run for these countries even not for domestic investments.

DYNAMICS OF EXPORTS, INFRASTRUCTURE, AND GROWTH IN GCC: VARS AND CAUSALITY TESTING

The paper is concerned with analyzing the dynamic effects of exports and infrastructure on GCC economic growth. Panel cointegration methodology is used to test for the existence of a long relationship between the variable. Two tests, Kao (1999) and Johansen cointegration tests are applied to check for cointegration. The results of the two tests reveal that there exists a long run co-integrating relationship between export and infrastructure proxies and economic growth in GCC countries. Additionally, fully modified least square (FMOLS) and dynamic ordinary least square (DOLS) were used to test the magnitude of the long relationship among variables. The results show that export and infrastructure variables are positive and have significant impact on the long run growth of the GCC economy. Further, fixed –effects method is selected as random effect model is rejected based on Hausman test result. The results of fixed effect show that export and infrastructure variables ate positive and statistically significant. With regard to policy, variable mixed results were obtained. As a policy recommendation the study, suggest that proper absorptive capacity such as deep financial institution, good infrastructure quality and supplementing public expenditures should be met in order to maximize the benefits of exports.
 
 JEL: C33; O11; F10; O19; O47
 
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Using Panel Time Series Models to Investigate Causality Between Insurance and Economic Growth in GCC Countries

Using Panel Time Series Models to Investigate Causality Between Insurance and Economic Growth in GCC Countries

DO ISLAMIC BANKS CONTRIBUTE TO ECONOMIC GROWTH? EVIDENCE FROM THE GCC COUNTRIES

The purpose of this study is to examine the existing relationship between Islamic banks' performance and economic growth in GCC countries. In this quest, this paper attempts to examine whether Islamic banks contribute to the economic growth. We develop a structural equation model to attest these links based on the evidence that Islamic finance contributes to higher levels of economic growth. As a measure of profitability, we include several determinants that are usually ignored in the literature; namely, size, liquidity, capital adequacy, credit risk, and expense management. The study covers Islamic banks operating in Bahrain, UAE, Kuwait, Oman, Qatar and Saudi Arabia over the period 2010 to 2017. We show a positive relationship between Islamic banks and economic growth, especially for the years immediately after the global financial crisis. In other words, Islamic banks performance have contributed to economic growth mainly during the period right after the financial crisis. Our findings represent a significant contribution to explaining how Islamic financial institutions' activities induce economic growth. Our findings could grant the managers of the Islamic banks a better understanding on how their institutions could improve economic performance as it reduces the severity of the financial crisis by avoiding major weaknesses of the conventional banking system.Keywords: GCC countries, Islamic banks, economic growth, structural equationJEL Classifications: G20; O11DOI: https://doi.org/10.32479/ijefi.10046

The impact of e-government on economic growth in GCC countries

This study is the first to empirically examine the impact of e-government on economic growth in Gulf Cooperation Council countries. The dataset used in the study covers the period 2003-2018 and is obtained from the World Development Indicators and the United Nations E-Government knowledgebase. The conducted empirical analysis brings out many interesting findings. First, there is evidence that the e-government development stimulated economic growth in GCC during the last two decades. Second, when considering the different components of e-government, it has been shown that only the Online Service Index and the Telecommunication Infrastructure Index have positive effects on economic growth. Finally, it has been also revealed that out from six countries, the positive impact of e-government is proved in only four countries, namely Bahrain, Kuwait, Saudi Arabia and the United Arab Emirates. In Oman and Qatar, the effect is not statistically significant. Global and country-specific policy recommendations are accordingly presented.

The Effect of FDI on the Convergence of Economic Growth Through the Prospective of Institutional Quality in GCC Countries

In the current study, we attempt to develop a model on how institutional quality aids economic growth convergence and FDI inflow in GCC countries using panel dataset spanning 1996 to 2016. We estimate growth convergence by deviating GDP growth rate of individual economy from its group average, emanating equation approximate ADF equation which was used for testing convergence in each economy. We found evidence of economic growth convergence in Saudi Arabia, Kuwait, UAE and Oman, while the economy of Kuwait and Qatar did not converge to the group average. The result of system GMM estimation shows that there is positive and significant relationship between FDI and economic growth in GCC economies, meanwhile, controlling for institutional quality produce mixed result because FDI negatively and significantly relates to FDI. We also found that FDI least contribute to the convergence of economic growth in GCC countries, while institutional quality produces positive and significant impact in converging growth in GCC economy. We therefore, recommend strengthening institutions as well as relaxing stringent rules that may hinder the activities of MNCs.

Foreign direct investment and oil/non-oil economic growth in GCC countries

This study is aimed at explaining the impact of oil resources on foreign direct investment inflows (FDI, hereafter) for GCC countries in several ways. First, by using panel data time series technique based on data covering the period (1980-2013), we found that only oil GDP and oil degree of openness have a significant positive impact on attracting FDI. Second, by considering sectoral analysis for four GCC countries (Oman, Qatar, Saudi Arabia and United Arab Emirates), we conclude that sectoral FDI has a positive impact on sectoral GDP while this impact is negative for the case of Oman. This implies that FDI supports the program of economic diversification in Qatar, Saudi Arabia and United Arab Emirates (UAE, hereafter).

Foreign direct investment and oil/non-oil economic growth in GCC countries

This study is aimed at explaining the impact of oil resources on foreign direct investment inflows (FDI, hereafter) for GCC countries in several ways. First, by using panel data time series technique based on data covering the period (1980-2013), we found that only oil GDP and oil degree of openness have a significant positive impact on attracting FDI. Second, by considering sectoral analysis for four GCC countries (Oman, Qatar, Saudi Arabia and United Arab Emirates), we conclude that sectoral FDI has a positive impact on sectoral GDP while this impact is negative for the case of Oman. This implies that FDI supports the program of economic diversification in Qatar, Saudi Arabia and United Arab Emirates (UAE, hereafter).

Financial development and economic growth in GCC countries

Purpose– The purpose of this paper is to compare the effects of Islamic financial development and conventional financial development on the economic growth for five GCC countries (Bahrain, Kuwait, Qatar Saudi Arabia and UAE).Design/methodology/approach– Using generalized least squares, OLS and panel data frameworks, this paper employs different measures of financial development for the period (1996-2011).Findings– Empirical results strongly support the hypothesis that Islamic finance leads to growth in the five GCC countries, however, no significant relationship observed between conventional financial development and growth.Practical implications– The findings of this paper suggest the need to accelerate the financial reforms for Islamic finance that have been launched in the region since the last decade and to improve the efficiency of these countries’ Islamic financial systems to stimulate saving/investment and, consequently, long-term economic growth.Originality/value– This study has several contributions to the existing literature. To the best of the authors’ knowledge, this paper is the first study that examines empirically the effect of Islamic finance on economic growth in GCC countries. As well, this paper is the first to compare the different effects of Islamic finance and conventional finance on economic growth on a context of countries having the most developed Islamic financial system in the world operating side-by-side with a conventional financial system.

Determinants of Economic Growth in GCC Economies

The paper investigates determinants of economic growth in GCC countries using VECM approach. The results report that in a 10-year horizon, FDI accounts 15.87%, 10.29%, 16.58%, 0.89% and 6.88% for Bahrain, Kuwait, Qatar, Saudi Arabia and United Arab Emirates respectively in shocks in their economic growth compared to the contributions of exports (9.55%, 1.33%, 6.85%, 10.38% and 20.9%) and gross capital formation (0.83%, 0.07%, 9.88%, 1.98 and 17.98%) for the countries respectively. The results also show that the main determinants of economic growth are foreign direct investment and gross capital formation for Bahrain. For Kuwait, Qatar and Saudi Arabia, exports and gross capital formation are the main determinants of economic growth. Exports and foreign direct investment are the main determinants of economic growth in United Arab Emirates. Finally, there is no any evidence for short-run or long-run unidirectional or bidirectional causality relationship for Oman.

The status of elders with and without disabilities and their services in United Arab Emirates

Introduction: In the light of developing the level of health care services in the world, taking care of elderly people in general has taken great deal of emphasis since the second half of 20th century. Context: Due to surplus of oil revenues, GCC countries have witnessed during the last four decades a rapid economic, social and cultural transformational movement which produced comprehensive and developmental programs in all aspects. It is quite notable that the economic growth in GCC countries was parallel with health, social, educational and cultural growth reflected in the concepts dealing with most needy groups of society such as children, handicapped and elders. Small and the large family in the United Arab Emirates (UAE) society have always been the safe haven to all its members from children to elderly stage. Since the UAE society pays a special tribute to elderly people being the men of yesterday and wise men of today, the elderly people have occupied a special place in social services policies implemented by UAE government since its establishment in 1971. Aims: The purpose of this paper is to overview the current services of elderly people especially those with handicapping conditions in UAE society. Analysis of social, economical and cultural background is taken into consideration when providing appropriate suggestions and recommendations to enhance and promote elderly programs.