SUPPLY CHAIN RESILIENCE AND INTERNATIONAL TRADE FLOW SUSTAINABILITY: EVIDENCE FROM SAUDI ARABIA
DOI:
https://doi.org/10.2478/eoik-2025-0105Keywords:
Supply Chain, International Trade, Geopolitical Risks, Trade War, Covid 19Abstract
This study investigates Saudi Arabia’s supply chain resilience and
trade flow sustainability amid global disruptions such as the U.S.–Chi-
na trade war and the Russia–Ukraine conflict. A novel methodologi-
cal contribution is made by integrating Principal Component Analysis
(PCA) with a Vector Error Correction Model (VECM), allowing for a
robust identification of the key determinants of trade flows, including
oil prices, trade openness, logistics efficiency, and geopolitical risks.
This integrated approach provides a comprehensive and dynamic as-
sessment of trade resilience in an oil-dependent economy. The findings
reveal that while oil prices continue to influence trade flows, Saudi
Arabia’s investments in logistics infrastructure, trade diversification,
and digital supply chain reforms play a more significant role in en-
suring stability. Moreover, the results show that geopolitical shocks,
though disruptive in the short term, have limited long-term impacts
due to Saudi Arabia’s strong global trade integration. This paper con-
tributes to the literature by demonstrating how supply chain efficiency
and diversification strategies can reduce vulnerability to global shocks.
It offers empirical evidence that distinguishes Saudi Arabia from other
hydrocarbon exporters, underscoring the importance of infrastructure,
openness, and strategic planning in sustaining trade resilience.
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