This study investigates the impact of remittance outflow on the economic growth (EG) of Saudi Arabia from 1985 to 2019, controlling for trade, labor force, human capital, and physical capital. Using the non-linear autoregressive distributive lag (NARDL) model, cointegrating regressions, and vector error correction (VEC) Granger causality check, the study finds that remittance outflow has mixed but negative short-run impacts on EG, while long-run EG is augmented if remittance outflows decline. Trade and labor force positively contribute to EG, while human and physical capital do not significantly influence it. Policymakers should attract expatriates' savings to domestic consumption and investment through labor laws, policies, and incentives, and upgrade education quality to develop the Saudi labor force.

Md. Saiful Islam, Ibrahim A. Alhamad