Inventory Investment and its Relation to the Sectoral GDP in Saudi Arabia

Journal Article

Alshebel, Alhoshan, Hamed, and Abdullah . 2014

• Magazine \ Newspaper: Journal of Business Studies /Faculty of commerce & Business Administration
• Issue Number: 1
• Volume Number: 28 part 3
• Pages: 1 to 23

Publication Abstract

In this paper we investigate the causality and co-integration between inventory investment and various types of Saudi Arabia’s GDP.  Saudi Arabia is an oil-based economy; therefore its total GDP is in fact disaggregated into three types of GDP; oil GDP, private GDP, and government GDP.  Using annual data from 1968 to 2011, we tested short-run and long-run causality.  Our results indicate that for inventory and government GDP, both types of causality run from the former to the latter, while there is a long-run causality running from inventory to private GDP, and a short-run causality running from inventory to oil GDP.