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Effect of per Capita Income, GDP Growth, FDI, Sectoral Composition, and Domestic Credit on Employment Patterns in GCC Countries: GMM and OLS Approaches

Author

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  • Nawal Abdalla Adam

    (Department of Management, College of Business Administration, Princess Nourah Bint Abdulrahman University, P.O. Box 84428, Riyadh 11671, Saudi Arabia)

  • Abad Alzuman

    (Department of Management, College of Business Administration, Princess Nourah Bint Abdulrahman University, P.O. Box 84428, Riyadh 11671, Saudi Arabia)

Abstract

This paper examines the impact of per capita income, gross domestic product (GDP) growth, foreign direct investment (FDI), sectoral composition, and domestic credit on employment patterns in the Gulf Cooperation Council (GCC) countries from 2013 to 2023, based on “Okun’s law”. The dynamic data panel was analyzed using the generalized method of moments (GMM) and the ordinary least square (OLS) method. The research findings reveal that the agricultural sector’s contributions have significantly influenced the employment patterns in GCC countries, emphasizing the traditional role of agriculture in creating job opportunities. However, the contribution of the services and industrial sectors has no significant impact on employment patterns. Domestic credit and FDI inflows have significantly influenced employment patterns in GCC countries, underscoring their vital role in sustaining long-term economic stability. Per capita income and GDP growth did not significantly impact the employment pattern in the GCC countries during the study period. This research provides valuable insights to policymakers, highlighting the need to focus on the services and industrial sectors to promote their contribution to employment in GCC countries. The research findings also augment the literature by identifying the key economic indicators contributing to GCC countries’ employment creation.

Suggested Citation

  • Nawal Abdalla Adam & Abad Alzuman, 2024. "Effect of per Capita Income, GDP Growth, FDI, Sectoral Composition, and Domestic Credit on Employment Patterns in GCC Countries: GMM and OLS Approaches," Economies, MDPI, vol. 12(11), pages 1-18, November.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:11:p:315-:d:1525462
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    References listed on IDEAS

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    1. Loizou, Efstratios & Karelakis, Christos & Galanopoulos, Konstantinos & Mattas, Konstadinos, 2019. "The role of agriculture as a development tool for a regional economy," Agricultural Systems, Elsevier, vol. 173(C), pages 482-490.
    2. Saman Mazhar & Ali Sher & Azhar Abbas & Abdul Ghafoor & Guanghua Lin, 2022. "Empowering Shepreneurs to achieve the sustainable development goals: Exploring the impact of interest‐free start‐up credit, skill development and ICTs use on entrepreneurial drive," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 1235-1251, October.
    3. Ching‐Hsing Chang & Ching‐Hung Chang & Pi‐Kun Hsu & Sheng‐Yung Yang, 2019. "The catalytic effect of internationalization on innovation," European Financial Management, European Financial Management Association, vol. 25(4), pages 942-977, September.
    4. Ismaila Y Jammeh, 2022. "The Relationship among Domestic Credit, Financial Development and Economic Growth in the Gambia," International Journal of Social Sciences Perspectives, Online Academic Press, vol. 10(2), pages 43-60.
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