The Impact of Expatriate Remittances on Economic Growth in the Kingdom of Saudi Arabia

Published: 2 April 2020| Version 1 | DOI: 10.17632/xzphcnhxpy.1
Imadeddin Almosabbeh


This study seeks to uncover the impact that expatriate labor remittances have on the economic growth of Saudi Arabia. The ARDL and NARDL methods have used to discover the influence and nature of the remittances on Saudi GDP growth. The study is based on data collected over the 1970-2016 timeframe. It concludes that the relationship between labor remittances and Saudi Arabian economic growth is asymmetrical; a one percent decrease in remittances increases GDP by 0.837 percent, while a one percent increase in remittances increases GDP by 0.291 percent. Our dataset collected data from the World Bank, SAMA and the Saudi General Authority of Statistics. This study investigates the impact of expatriate labor remittances (ELR) from Saudi Arabia on its economic growth rate. It uses a logarithmic function (the Cobb-Douglas model), where the logarithm of GDP (LGDP) at constant prices (2010 = 100) is the dependent variable, and the logarithm of the total remittances of expatriate labor (LTR) is the independent variable. Other variables include the natural logarithm of the consumer price index (LCPI), the natural logarithm of the population of 15-65 year-olds (LPOPL), the natural logarithm of fixed capital (LCPTL), the index of trade openness (OPN), and the logarithm of government expenditure at constant prices (LGOV).