Strategic impact of the public investment fund on Saudi Arabia’s financial performance
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Author(s)Feras Izzat KasasbehLink to ORCID Index: https://orcid.org/0000-0001-6605-232X
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DOIhttp://dx.doi.org/10.21511/imfi.22(3).2025.25
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Article InfoVolume 22 2025, Issue #3, pp. 334-348
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66 Downloads
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Creative Commons Attribution 4.0 International License
Type of the article: Research paper
Abstract
The Public Investment Fund (PIF), Saudi Arabia, founded in 1971, at the forefront of reshaping Saudi Arabia’s economic flow through its Vision 2030, diversification from crude oil revenues and towards more sustainable growth. The study attempts to quantify the impact of PIF on the financial performance of the country, looking into key economic indicators such as GDP growth, foreign direct investment (FDI), and stock market stability. The study adopts a mixed-methods approach and uses data from 2018 to 2023. The dataset comprises annual economic reports from the Saudi Central Bank, General Authority for Statistics, investment data from the Public Investment Fund’s, and financial market data from Tadawul Stock Exchange. Analysis reveals a statistically significant positive correlation (R = 0.46, p < 0.05) between increases in PIF’s Assets under Management (AUM) and national GDP growth, suggesting that strategic public investments strongly contribute to macroeconomic expansion. Strategic PIF investments resulted in a notable 45% rise in FDI specifically into the non-oil sector, alongside a 30% increase in domestic job creation between 2018 and 2023. Additionally, stock market stability significantly improved during the study period, as evidenced by reduced volatility and a sustained upward trend in the Tadawul All Share Index (TASI), reflecting strengthened investor confidence driven by PIF initiatives. These findings underscore the strategic role of PIF in catalyzing Saudi Arabia’s transition toward a diversified and sustainable economy, supporting green energy initiatives, population-driven economic growth, and substantial progress in national mega-projects.
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JEL Classification (Paper profile tab)E22, F21, O16, G23
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References19
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Tables11
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Figures5
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- Figure 1. Economic and financial indicators (2018–2023)
- Figure 2. Gross AUM & GDP over time
- Figure 3. Tadawul’s all share trading volume from 2018 to 2023
- Figure 4. REER index from 2018 to 2023
- Figure 5. Consumer price inflation from 2018 to 2023
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- Table 1. Descriptive statistics
- Table 2. Correlations matrix
- Table 3. Regression REER index
- Table 4. Regression for GDP (current US$ billion)
- Table 5. Regression for TASV
- Table 6. Regression for inflation
- Table 7. Summary of regression
- Table 8. Regression financial model analysis
- Table 9. Factor analysis of economic indicators
- Table 10. Fit in model evaluation
- Table 11. Fit measures for model evaluation
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Industrial development in Saudi Arabia: disparity in growth and development
Anis Ali
doi: http://dx.doi.org/10.21511/ppm.18(2).2020.03
Problems and Perspectives in Management Volume 18, 2020 Issue #2 pp. 23-35 Views: 3939 Downloads: 1383 TO CITE АНОТАЦІЯIndustrial development in any nation plays a vital role in the strengthening of the economy and employs human resources as per specifications and directly towards the mainstream of the nation. In Saudi Arabia, there was rapid industrialization for four decades. Some manufacturing industries performed well, while some internal and external business environment factors influenced the others’ performance. The study focuses on historical development, as well as recent trends of well-performing and poor-performing industries of Saudi Arabia. Small manufacturing industries in Saudi Arabia are underdeveloped and need more attention to attain sustainable and progressive growth rate in the form of the number of establishments to enjoy the potential. Manufacture of tobacco, computer, electronics and optics, pharmaceuticals and transport equipment are the deprived and underdeveloped industries of the manufacturing sector. There should be some easy credit schemes for the development of deprived or underdeveloped manufacturing industries. To attain sustainable growth and development of the manufacturing sector, a positive attitude of the government towards underdeveloped manufacturing industries, favorable labor laws, and entrepreneurial awareness, technical and financial assistance are necessary. The growth and development of the manufacturing sector of Saudi Arabia will be helpful in the attainment of goals of Vision 2030.
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Why banks should consider ESG risk factors in bank lending?
Sarwar Uddin Ahmed ,
Samiul Parvez Ahmed ,
Ikramul Hasan
doi: http://dx.doi.org/10.21511/bbs.13(3).2018.07
Banks and Bank Systems Volume 13, 2018 Issue #3 pp. 71-80 Views: 3585 Downloads: 1507 TO CITE АНОТАЦІЯWhy banks should be concerned about incorporating environmental, social and governance (ESG) criteria in the lending process? What is the motivation? This study aims to find the motives for considering environmental, social and governance (ESG) criteria in bank lending process. A primary survey has been conducted to know the current status and motivation for incorporating ESG factors in investment decisions. Sample comprised 30 private commercial banks (PCBs) operating in Bangladesh. Data collected were analyzed with graphs, descriptive statistics, and regression analysis. Findings of the study indicate that banks are mostly considering basic environmental, social and governance factors set by regulators qualitatively. They are lagging behind in considering the advanced ESG criteria needed for sustainable and efficient credit risk management. Based on motivation for incorporating ESG factors, it was found that banks pioneering in incorporating ESG factors in lending decisions are compensated through better financial performance. Findings of the study are expected to encourage practitioners and policy-makers to take more pragmatic steps to incorporate ESG risk factors quantitatively in lending decision-making process.
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ERP implementation in banks: success factors & impact on financial performance
Banks and Bank Systems Volume 12, 2017 Issue #4 pp. 17-30 Views: 3345 Downloads: 1450 TO CITE АНОТАЦІЯThe study aims to measure the extent of implementing ERP systems in the banking sector in Jordan, and identify the main factors that influence the implementation decision, in addition to measure the impact of the post-implementation of the ERP system on the financial performance. The study utilized a content analysis as a research instrument. The study of population consisted of all the banks in Jordan, where the study applied ‘Purposive Sample’ type. Therefore, the study included 11 banks from 2011 to 2016.
The study indicated that the implementation year of the ERP system started in most of the Jordanian banks in 2013, and the rates vary from bank to bank according to their importance and the level of awareness. Training courses are considered the main variable that these banks face in the process of implementation. In addition, awareness of the advantages, the cost, and supporting the infrastructure are the core factors needed to influence the implementation decision.
There is no impact when implementing an ERP system on the financial performance of the Jordanian banks in regard to the ROI and the DPS; on the other hand, there is an impact of the ERP system on the overall performance of the banks.
The study recommends to disseminate knowledge on the advantages of implementing of ERP system in Jordanian banks and to develop the IT department efficiency. Moreover, it will be worthwhile to examine the effect of ERP systems by utilizing financial and non-financial measurements.
