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Determinants of Diversification from Oil Sector in Saudi Arabia

Author

Listed:
  • Khalid Abdullah Alkhathlan

    (Department of Economics, 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

    (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.)

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.

Suggested Citation

  • Khalid Abdullah Alkhathlan & Tarek Tawfik Yousef Alkhateeb & Haider Mahmood & Wardah Abdulrahman Bindabel, 2020. "Determinants of Diversification from Oil Sector in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 384-391.
    • Handle: RePEc:eco:journ2:2020-05-44
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    References listed on IDEAS

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    Cited by:

    1. Mahmood, Haider & Chaudhary, A. R., 2013. "Impact of FDI on Income Inequality in Pakistan," MPRA Paper 109460, University Library of Munich, Germany.
    2. Haider Mahmood, 2021. "Oil Price and Industrial Growth in Saudi Arabia: Sectoral and Asymmetry Analyses," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 7-13.
    3. Al-Qahtani, Maleeha Mohammed Zaaf & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider & Abdalla, Manal Abdalla Zahed & Mawad, Ghada Shihata Ebrahim & Alkhatib, Maha Ahmed Hussein, 2020. "Exploring the Level of Managerial, Political, Academic, Economic and Social Women Empowerment in Saudi Arabia," MPRA Paper 109447, University Library of Munich, Germany.
    4. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "Oil Price and Capital Formation Nexus in GCC Countries: Asymmetry Analyses," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 146-151.

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    More about this item

    Keywords

    diversification; exports; government revenue and spending; money supply;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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