Re-Examining Government Revenues, Government Spending And Economic Growth In GCC Countries

Helmi Hamdi, Rashid Sbia
2013 Journal of Applied Business Research  
<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; line-height: normal; mso-pagination: none; mso-layout-grid-align: none;" class="MsoNormal"><span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-style: italic;">The aim of this paper is to examine the inter-temporal relationship between government revenues and expenditures within a trivariate framework by
more » ... e framework by modeling them together with gross domestic product.<span style="mso-spacerun: yes;"> </span>Our sample is based on a panel of 6 countries of the Gulf Cooperation Council </span><span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt;">(GCC) <span style="mso-bidi-font-style: italic;">i.e. Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Oman and Bahrain, for the period from 1990 to 2010.<span style="mso-spacerun: yes;"> </span>We perform an econometric model based on the Toda and Yamamoto procedure.<span style="mso-spacerun: yes;"> </span>Our empirical results show that government expenditures Granger cause government revenues for Qatar and the United Arab Emirates only, while government revenues Granger cause government expenditures for Saudi Arabia only.<span style="mso-spacerun: yes;"> </span>We also found a unidirectional causality running from government expenditures to GDP in Bahrain only.<span style="mso-spacerun: yes;"> </span>Regarding Kuwait, Qatar and Saudi Arabia, GDP Granger cause government revenues while GDP Granger cause government expenditures for Oman and Qatar.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>
doi:10.19030/jabr.v29i3.7777 fatcat:kr3hhy5fqvf67osjbj5g35v4jy