Unlocking Growth in the Digital Age: Harnessing Globalization and Digital Transformation in Saudi Arabia

In the contemporary landscape of globalization, digitalization emerges as a pivotal indicator of technological progress, profoundly influencing economic performance and contributing to GDP growth. However, this assertion necessitates further empirical validation. This study investigates the causal and cointegration relationship between socioeconomic globalization, digitalization, and their impact on economic growth, utilizing Saudi Arabia as a distinctive case study of global economic transformation from 1990 to 2022. Employing the ARDL model alongside various estimation methods, including OLS, FMOLS, DOLS, and CCR, we identified the most statistically significant factors contributing to economic growth. Our findings reveal that globalization exerts a negative and significant impact on GDP per capita at the 1 percent significance level. Conversely, the results indicate that digitalization substantially contributes to economic growth in both the short and long term. Based on these findings, this paper proposes several critical policy recommendations aimed at enhancing the economic landscape of Saudi Arabia and other developing nations.