Determinants of Diversification from Oil Sector in Saudi Arabia

Authors

  • Khalid Abdullah Alkhathlan Economics Department, King Saud University, Saudi Arabia
  • Tarek Tawfik Yousef Alkhateeb College of Business Administration, Prince Sattam bin Abdulaziz University, 173 Alkharj 11942, Saudi Arabia and Kafr Elshiekh University, Kafr Elshiekh 33511, Egypt
  • Haider Mahmood Associate Professor, Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia. http://orcid.org/0000-0002-6474-4338
  • Wardah Abdulrahman Bindabel College of Business Administration, Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia.

Abstract

Saudi Arabia targets diversification policy in the Vision 2030. This study estimates the production, exports, government revenue, investment and employment diversification indices and also finds its determinants. Increasing inflation promotes the production and export diversification and depresses the investment, government revenue and employment diversification. The depreciation policy encourages the government revenue diversification and reduces investment and employment diversification. Foreign Direct Investment (FDI) improved the government revenue diversification and weakens the export diversification. Economic growth stimulates the government revenue, employment and export diversification and slow down the production and investment diversification. Government spending improves the production and investment diversification and dampens the government revenue and exports diversification. Capital formation promotes the export diversification and reduces the government revenue and employment diversification. Money supply diminishes the investment, government revenue, exports and employment diversification. Subsidies expand production diversification and contract the government revenue diversification. Trade openness lifts up the investment and employment diversification and reduces the government revenue diversification.

Keywords: diversification, exports, government revenue and spending, money supply 

JEL Classifications: L25, B17, E62, E52

DOI: https://doi.org/10.32479/ijeep.9709

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Author Biographies

Khalid Abdullah Alkhathlan, Economics Department, King Saud University, Saudi Arabia

Economics Department, King Saud University, Saudi Arabia 

Tarek Tawfik Yousef Alkhateeb, College of Business Administration, Prince Sattam bin Abdulaziz University, 173 Alkharj 11942, Saudi Arabia and Kafr Elshiekh University, Kafr Elshiekh 33511, Egypt

College of Business Administration, Prince Sattam bin Abdulaziz University, 173 Alkharj 11942, Saudi Arabia and Kafr Elshiekh University, Kafr Elshiekh 33511, Egypt

Haider Mahmood, Associate Professor, Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia.

Associate Professor, Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz  university, Alkharj, Saudi Arabia.

Wardah Abdulrahman Bindabel, College of Business Administration, Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia.

College of Business Administration, Prince Sattam Bin Abdulaziz  university, Alkharj, Saudi Arabia.

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Published

2020-08-10

How to Cite

Alkhathlan, K. A., Alkhateeb, T. T. Y., Mahmood, H., & Bindabel, W. A. (2020). Determinants of Diversification from Oil Sector in Saudi Arabia. International Journal of Energy Economics and Policy, 10(5), 384–391. Retrieved from https://econjournals.com/index.php/ijeep/article/view/9709

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