The Effect of Change in GDP on FDI in the Saudi Oil Sector Using the Adhocks Model of the Lagged External Variables, for Period, 1994-2017 an Econometrics Study

Abstract

The importance of foreign direct investment (FDI) to the Saudi oil sector, like other countries in the world, which is considered one of the important and complementary sources of domestic investment, is very important. FDI is no longer only about the transfer of capital, but is also a necessary source of knowledge transfer in modern management. The transfer of advanced technology, the training and development of local technical cadres and the creation of more jobs for citizens. However, there is a decline in the degree of openness of the legislative environment attractive to foreign direct investment in terms of transparency, in spite of the available legal and administrative legislation in Saudi Arabia, as the volume of foreign investment flowing into the Saudi oil sector has fluctuated and instability of annual decay rates for several reasons, The rate of change in GDP during the period 1990-2000 was only increasing in some years as a result of the first Gulf crisis, depriving Iraq of the oil resource and increasing the production of Saudi Arabia to compensate for the shortage in the oil market and so the increase was after the second Gulf war in 2003 The rate of change has increased steadily due to the shortage after the United Nations exported

The importance of foreign direct investment (FDI) to the Saudi oil sector, like other countries in the world, which is considered one of the important and complementary sources of domestic investment, is very important. FDI is no longer only about the transfer of capital, but is also a necessary source of knowledge transfer in modern management. The transfer of advanced technology, the training and development of local technical cadres and the creation of more jobs for citizens. However, there is a decline in the degree of openness of the legislative environment attractive to foreign direct investment in terms of transparency, in spite of the available legal and administrative legislation in Saudi Arabia, as the volume of foreign investment flowing into the Saudi oil sector has fluctuated and instability of annual decay rates for several reasons, The rate of change in GDP during the period 1990-2000 was only increasing in some years as a result of the first Gulf crisis, depriving Iraq of the oil resource and increasing the production of Saudi Arabia to compensate for the shortage in the oil market and so the increase was after the second Gulf war in 2003 The rate of change has increased steadily due to the shortage after the United Nations exported Iraqi oil in the oil-for-food agreement, in addition to the rising oil prices, which led to an increase in Saudi oil production and consequently increased the rate of change in GDP, In the estimated model in the eighth phase of Table 3, the data were tested by the COOKS DISTANCE TEST, indicating that the normal values ​​and abnormal values ​​were close to the distance and less than 20%, which is recommended by the statistical world COOKS, which is estimated by the estimated model of 12% The data for the eighth stage is stable, while most of the stages were different in the data and the estimated distance by the test is more than 20%. Therefore, this model is considered the best of the models and therefore it will be chosen to represent the relation between the ratio of change in GDP and investment.   

Iraqi oil in the oil-for-food agreement, in addition to the rising oil prices, which led to an increase in Saudi oil production and consequently increased the rate of change in GDP, In the estimated model in the eighth phase of Table 3, the data were tested by the COOKS DISTANCE TEST, indicating that the normal values ​​and abnormal values ​​were close to the distance and less than 20%, which is recommended by the statistical world COOKS, which is estimated by the estimated model of 12% The data for the eighth stage is stable, while most of the stages were different in the data and the estimated distance by the test is more than 20%. Therefore, this model is considered the best of the models and therefore it will be chosen to represent the relation between the ratio of change in GDP and investment.