Economic diversification in Saudi Arabia: Comparing the impact of oil prices, geopolitical risk, and government expenditures

International Economics Pub Date : 2023-10-01 DOI:10.1016/j.inteco.2023.05.003

Osama D. Sweidan , Khadiga Elbargathi

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引用次数: 1

Abstract

Our paper examines and compares the influence of oil prices, international geopolitical risks, and government expenditures on Saudi Arabia's economic diversification during 1970–2020. We employ the bounds testing approach to cointegration to estimate the parameters of the Autoregressive Distributed Lag model to attain the paper's goal. Our results show that oil prices and international geopolitical risk harm the KSA diversification process in the short run. The destructive effect of oil prices continues in the long run, while the impact of the international geopolitical risk does not persist. On the other hand, government expenditures encourage the diversification attitude in the short and long run. This outcome highlights the capability of the KSA government to stimulate the diversification process. It is a positive sign of the state capitalism doctrine's impact on the KSA economic diversification mechanism. From a policy implication perspective, our paper suggests prioritizing economic diversification clearly on the KSA government's agenda. Simultaneously, strengthening the KSA institutional framework and developing new forms of the social contract are critical to motivating the diversification process.

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沙特阿拉伯的经济多元化:比较油价、地缘政治风险和政府支出的影响

本文考察并比较了1970-2020年期间油价、国际地缘政治风险和政府支出对沙特阿拉伯经济多元化的影响。为了达到本文的目的，我们采用协整的边界检验方法来估计自回归分布滞后模型的参数。研究结果表明，油价和国际地缘政治风险在短期内损害了沙特阿拉伯的多元化进程。从长远来看，油价的破坏性影响仍在继续，而国际地缘政治风险的影响并不持久。另一方面，从短期和长期来看，政府支出鼓励多元化的态度。这一结果凸显了沙特政府刺激多元化进程的能力。这是国家资本主义理论对沙特经济多元化机制产生影响的积极标志。从政策意涵的角度来看，本文建议将经济多元化明确地放在沙特政府的议程上。同时，加强KSA体制框架和发展新的社会契约形式对于推动多样化进程至关重要。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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