The Impact of International Trade on Sustainable Development in Saudi Arabia


Sustainable development, international trade, trade openness, foreign direct investment, inflation


Globally, sustainable development has been considered the key policy objective to achieve through international trade. Not surprisingly, this aspect has captured the attention of policy regulators and scholars alike. Thus, the present study identifies the need to investigate into the impact of international trade (trade openness) on sustainable development in Saudi Arabia. This study uses the real interest rate, foreign direct investment (FDI), exchange rate and inflation as the control variables. The author employees’ secondary sources of data such as sustainable development reports and World Development Indicators (WDI) from 1986 to 2020. The autoregressive distributed lag (ARDL) model is used to test the association among constructs and the Granger causality to investigate the causality between variables. The results reveal that trade openness, interest rate, FDI, exchange rate and inflation a have positive and significant relationship with sustainable development in Saudi Arabia. This study guides policymakers in formulating regulations related to sustainable development through international trade.