Volume 29, Issue 3
DOI: 10.24205/03276716.2020.702
Nexus between Natural Resources, Technology Innovation, Green Energy and Financial Performance in the Saudi Arabia: Evidence from asymmetric causality test
Abstract
After the global financial crisis, the volatilities in oil prices have caused a severe negative impact on the Saudi Arabia’s earning hence government initiated the policies to decrease its oil dependence and recognized the substantial role of the financial sector. In this regard, the goal of the study is to recognize the potential role of natural resources, green energy, and technological innovations in influencing the performance of the financial sector in the Saudi economy. For recognizing the asymmetric empirical relationship among the studied variables on the data from 1990 to 2018, nonlinear ARDL was applied. The results confirm that positive shocks of natural resources and technology innovation increase the financial performance in Saudi Arabia whereas the positive and negative fluctuation in green energy have a positive and significant impact on financial performance. Based on the findings, proper allocation for the natural resources for improving financial performance is recommended whereas more attention is needed to improve technology innovation. Lastly, this study helps in providing better understanding of the determinants of Saudi Arabia's financial performance with an application of NARDL that further helps in capturing the asymmetric empirical relationship among the studied variables.
Keywords
Natural resources, technology innovation, green energy, financial performance, Saudi Arabia.