Trade openness relationship with macroeconomic factors on Saudi Arabian economy: ARDL application

Purpose – This paper examines the relationship of financial market inclusion, economic growth, foreign direct investment and real output on trade openness for the Saudi Arabia Economy. Trade openness potentially is a major source of economic growth and development. Design/methodology/approach – This study is the first employing mixed methods and approaches of autoregressive distributed lag (ARDL) to estimate the long-run and short-run models for the Saudi Arabia Economy. Findings – The results indicate that the inclusion of financial markets has an important role in the short term and has an effect on trade openness on this economy. Practical implications – These results listed are only implications for decision-makers to achieve their objectives. Indeed, to have better economic growth, economic and financial decision-makers can rely on financial inclusion and trade openness. Originality/value – This article investigates an approach testing the relationship of variables in a short and long term by using annual data from 1990 to 2017 for the Saudi Arabia economy. This paper tests the relationship between finance and economy with an econometric model.