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The Impact of Non-Oil Exports on the Economic Growth in Saudi Arabia: An Empirical Analysis

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  • Sahar Hassan Khayat

Abstract

This study aims to investigate the impact of non-oil exports on the economic growth of Saudi Arabia during the period 2000-2022. Since Saudi Arabia targets to transform their economy from dependence to the diversification of economic resources, it is important to evaluate the impact of non-oil exports on the gross domestic product (GDP) in the long run. This study used multivariate time series analysis, including Johansen-Juselius co-integration and Vector Error Correction Model to determine the long-run relationship between them. The findings of the study revealed that non-oil exports have a statistically significant impact on economic growth in the long run. However, oil exports have a negative relationship with economic growth in the long run. Moreover, it also observed that a real effective exchange rate negatively affects economic growth while gross capital formation has a positive impact on economic growth in the long run. It is recommended that the non-oil sectors should be considered as a prime concern regarding infrastructural development due to their instant return to the country and should provide loans at minimal or zero interest to support them in the effective production of non-oil exports. Moreover, also makes legislation in the favor of domestic and foreign stakeholders so that they can encourage them to invest in non-oil exports and expand the non-oil sector.

Suggested Citation

  • Sahar Hassan Khayat, 2024. "The Impact of Non-Oil Exports on the Economic Growth in Saudi Arabia: An Empirical Analysis," International Business Research, Canadian Center of Science and Education, vol. 17(3), pages 1-89, June.
    • Handle: RePEc:ibn:ibrjnl:v:17:y:2024:i:3:p:89
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    References listed on IDEAS

    as
    1. Waheed, Rida & Sarwar, Suleman & Dignah, Ashwaq, 2020. "The role of non-oil exports, tourism and renewable energy to achieve sustainable economic growth: What we learn from the experience of Saudi Arabia," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 49-58.
    2. Le, Thai-Ha & Nguyen, Canh Phuc & Su, Thanh Dinh & Tran-Nam, Binh, 2020. "The Kuznets curve for export diversification and income inequality: Evidence from a global sample," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 21-39.
    3. Albassam, Bassam A., 2015. "Economic diversification in Saudi Arabia: Myth or reality?," Resources Policy, Elsevier, vol. 44(C), pages 112-117.
    4. Ozoemena Stanley Nwodo & Fredrick Onyebuchi Asogwa, 2017. "Global Integration, Non-Oil Export and Economic Growth in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(1), pages 59-67, March.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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