The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration

This study attempts to estimate the optimum government size in the kingdom of Saudi Arabia (KSA) using annual data covering the 1971–2019 period by applying the linear and nonlinear Autoregressive Distributed Lag $$\left({{\rm{ARDL}}} \right)$$ Model. The main focus is whether the Armey curve is val...

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Autor principal:	Bashier Al-Abdulrazag
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	e62 i18 q31 Finance HG1-9999 Economic theory. Demography HB1-3840
Acceso en línea:	https://doaj.org/article/719a102f9ba14fbe967fb3e574e0626f
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spelling	oai:doaj.org-article:719a102f9ba14fbe967fb3e574e0626f2021-11-26T11:19:50ZThe optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration2332-203910.1080/23322039.2021.2001960https://doaj.org/article/719a102f9ba14fbe967fb3e574e0626f2021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23322039.2021.2001960https://doaj.org/toc/2332-2039This study attempts to estimate the optimum government size in the kingdom of Saudi Arabia (KSA) using annual data covering the 1971–2019 period by applying the linear and nonlinear Autoregressive Distributed Lag $$\left({{\rm{ARDL}}} \right)$$ Model. The main focus is whether the Armey curve is valid for KSA. The statistical diagnostic tests provide an evidence for the model adequacy and that the estimation results are reliable. Moreover, the ARDL short-run estimation results revealed that the speed of adjustment is (−0.82) indicating that it takes about 14 months to correct toward the long-run equilibrium due to a short-run shock. The NARDL estimation results revealed asymmetric relationship between government expenditures and economic growth. Further, a positive shock has a positive impact while a negative shock reduces economic growth. Based on the long-run estimation results, the optimum government size is 26.9 as a share of GDP, which is greater than the average share (24.2) during the study period. Based on such result, it is obvious that Saudi Arabia has a room to increase the expenditures share up to the optimal size estimated in the study.Bashier Al-AbdulrazagTaylor & Francis Grouparticlee62i18q31FinanceHG1-9999Economic theory. DemographyHB1-3840ENCogent Economics & Finance, Vol 9, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	e62 i18 q31 Finance HG1-9999 Economic theory. Demography HB1-3840
spellingShingle	e62 i18 q31 Finance HG1-9999 Economic theory. Demography HB1-3840 Bashier Al-Abdulrazag The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration
description	This study attempts to estimate the optimum government size in the kingdom of Saudi Arabia (KSA) using annual data covering the 1971–2019 period by applying the linear and nonlinear Autoregressive Distributed Lag $$\left({{\rm{ARDL}}} \right)$$ Model. The main focus is whether the Armey curve is valid for KSA. The statistical diagnostic tests provide an evidence for the model adequacy and that the estimation results are reliable. Moreover, the ARDL short-run estimation results revealed that the speed of adjustment is (−0.82) indicating that it takes about 14 months to correct toward the long-run equilibrium due to a short-run shock. The NARDL estimation results revealed asymmetric relationship between government expenditures and economic growth. Further, a positive shock has a positive impact while a negative shock reduces economic growth. Based on the long-run estimation results, the optimum government size is 26.9 as a share of GDP, which is greater than the average share (24.2) during the study period. Based on such result, it is obvious that Saudi Arabia has a room to increase the expenditures share up to the optimal size estimated in the study.
format	article
author	Bashier Al-Abdulrazag
author_facet	Bashier Al-Abdulrazag
author_sort	Bashier Al-Abdulrazag
title	The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration
title_short	The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration
title_full	The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration
title_fullStr	The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration
title_full_unstemmed	The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration
title_sort	optimal government size in the kingdom of saudi arabia: an ardl bounds testing approach to cointegration
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/719a102f9ba14fbe967fb3e574e0626f
work_keys_str_mv	AT bashieralabdulrazag theoptimalgovernmentsizeinthekingdomofsaudiarabiaanardlboundstestingapproachtocointegration AT bashieralabdulrazag optimalgovernmentsizeinthekingdomofsaudiarabiaanardlboundstestingapproachtocointegration
_version_	1718409479613054976

The optimal government size in the kingdom of Saudi Arabia: an ARDL bounds testing approach to cointegration

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