An Analytical Study of Foreign Direct Investment in Saudi Arabia During 1979-2019: ARDL Approach.

This paper focused on studying the determinants of foreign investment in the Kingdom of Saudi Arabia between 1979 and 2019. The context of the study is unique in that it targeted KSA, a developing nation, and its 41-year market starting in 1979 through 2019. This study uses some technique such as, cointegration by unit roots test (ADF, PP and KPSS), Johansen's cointegration test (trace and maximum-eigenvalue) and Granger causality tests for short-run and long-run in order to confirm causal relationship between variables. moreover, this study uses ARDL regression to test the short-run and long-run relationship between determinants of FDI. The study revealed that FDI has cointegrating with some variables as tested by Johansen's cointegration test. Moreover, Granger causality tests. The results of Granger causality tests show that FDI does not Granger cause with all variables during the short-run but GDP Granger cause with FDI. Moreover, GDP, inflation and external balance have causality with FDI during long-run. in addition, the results of ARDL (short-run) found that external balance has effect positively significant with FDI. the outcomes are expected to boost the flow of foreign investment, which is the paper's goal that has been central from the start. The report confirms all recent and existing studies and is considered to be a comprehensive contribution to the Saudi economy, since the report selected a 41-year period - one not previously studied by previous researchers. [ABSTRACT FROM AUTHOR]