Does inflation reduce remittance outflows in Saudi Arabia?
This study examines the potential relationship between inflation and remittance outflows in Saudi Arabia over the period 1971–2019 by applying the autoregressive distributed lag (ARDL) model. As a pioneering study in Saudi Arabia, the paper addresses an important literature gap. The statistical test...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2022-12-01
|
| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2022.2141424 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850124316340912128 |
|---|---|
| author | Bashier Al-Abdulrazag Musa Foudeh |
| author_facet | Bashier Al-Abdulrazag Musa Foudeh |
| author_sort | Bashier Al-Abdulrazag |
| collection | DOAJ |
| description | This study examines the potential relationship between inflation and remittance outflows in Saudi Arabia over the period 1971–2019 by applying the autoregressive distributed lag (ARDL) model. As a pioneering study in Saudi Arabia, the paper addresses an important literature gap. The statistical tests reveal the model’s reliability and the existence of a long-run equilibrium among the variables. Moreover, the empirical results show a significant negative impact of inflation has on remittance outflows, and the short-run and long elasticities of remittance with respect to inflation are 0.26% and 0.32% respectively. These results suggest that despite the weak elasticity of remittance outflows to the inflation rate, an increase in general prices would reduce remittance outflows in Saudi Arabia. Moreover, we find that the capital investment indicator has a more significant effect on the volume of remittance outflows. Therefore, policymakers in Saudi Arabia should apply appropriate actions to reduce the outflows of foreign workers by urging private companies to hire more Saudi workers, increasing capital investment and encouraging foreign workers, especially those with high incomes, to invest in Saudi Arabia by facilitating their ownership of financial market shares and real estate units. |
| format | Article |
| id | doaj-art-f5f4dd41ff9d4c46bc0fc742d3d8045d |
| institution | OA Journals |
| issn | 2332-2039 |
| language | English |
| publishDate | 2022-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj-art-f5f4dd41ff9d4c46bc0fc742d3d8045d2025-08-20T02:34:20ZengTaylor & Francis GroupCogent Economics & Finance2332-20392022-12-0110110.1080/23322039.2022.2141424Does inflation reduce remittance outflows in Saudi Arabia?Bashier Al-Abdulrazag0Musa Foudeh1Department of Economics, King Saud University, Riyadh, KSADepartment of Economics, Imam Mohammad Ibn Saud Islamic University, Riyadh, KSAThis study examines the potential relationship between inflation and remittance outflows in Saudi Arabia over the period 1971–2019 by applying the autoregressive distributed lag (ARDL) model. As a pioneering study in Saudi Arabia, the paper addresses an important literature gap. The statistical tests reveal the model’s reliability and the existence of a long-run equilibrium among the variables. Moreover, the empirical results show a significant negative impact of inflation has on remittance outflows, and the short-run and long elasticities of remittance with respect to inflation are 0.26% and 0.32% respectively. These results suggest that despite the weak elasticity of remittance outflows to the inflation rate, an increase in general prices would reduce remittance outflows in Saudi Arabia. Moreover, we find that the capital investment indicator has a more significant effect on the volume of remittance outflows. Therefore, policymakers in Saudi Arabia should apply appropriate actions to reduce the outflows of foreign workers by urging private companies to hire more Saudi workers, increasing capital investment and encouraging foreign workers, especially those with high incomes, to invest in Saudi Arabia by facilitating their ownership of financial market shares and real estate units.https://www.tandfonline.com/doi/10.1080/23322039.2022.2141424Saudi Arabiaremittance outflowsinflationautoregressive distributed lags modelcointegrationO53 |
| spellingShingle | Bashier Al-Abdulrazag Musa Foudeh Does inflation reduce remittance outflows in Saudi Arabia? Cogent Economics & Finance Saudi Arabia remittance outflows inflation autoregressive distributed lags model cointegration O53 |
| title | Does inflation reduce remittance outflows in Saudi Arabia? |
| title_full | Does inflation reduce remittance outflows in Saudi Arabia? |
| title_fullStr | Does inflation reduce remittance outflows in Saudi Arabia? |
| title_full_unstemmed | Does inflation reduce remittance outflows in Saudi Arabia? |
| title_short | Does inflation reduce remittance outflows in Saudi Arabia? |
| title_sort | does inflation reduce remittance outflows in saudi arabia |
| topic | Saudi Arabia remittance outflows inflation autoregressive distributed lags model cointegration O53 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2022.2141424 |
| work_keys_str_mv | AT bashieralabdulrazag doesinflationreduceremittanceoutflowsinsaudiarabia AT musafoudeh doesinflationreduceremittanceoutflowsinsaudiarabia |