The Role of the Manufacturing Sector in Promoting Economic Growth in the Saudi Economy: A Cointegration and VECM Approach

• 발행기관: 한국유통과학회
• 저자명: Mohamed A. M. SALLAM
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.7, 21~30쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.07.30

영문 초록

This study examines the role of the manufacturing sector in stimulating economic growth in the Saudi economy. Even though the economic literature shows how the manufacturing sector stimulates economic growth, it does not clearly show the role of the manufacturing sector in economic growth. The study employed annual time-series data spanning the 1980–2018 period from the databases of the Saudi Arabian Monetary Authority. Moreover, the cointegration and VECM approaches were employed to examine the short- and long-run relationship causality between variables. The results show a two-way causal relationship exists between the manufacturing sector and economic growth. Furthermore, the results indicate that a unidirectional causal relationship exists, running from the manufacturing sector to the services sector. The study recommends that the determinants of the growth of the Saudi manufacturing sector must be investigated. Moreover, the most productive Saudi manufacturing industries must be identified, and the productivity of other sectors must be increased in a way that contributes to economic plans and policies. Thus, adopting economic policies that stimulate investment in the manufacturing sector contributes to increasing non-oil exports to diversify sources of income to achieve vision 2030 of the Kingdom of Saudi Arabia.

목차

1. Introduction

2. Literature Review

3. Method and Estimated Model

4. Results

5. Conclusion

키워드

Kaldor’s Law Economic Growth Manufacturing Sector Cointegration VECM Approach