The Linkage between Oil and Non-Oil GDP in Saudi Arabia

Round 1

Reviewer 1 Report

Good afternoon. The article is interesting. There are no serious comments.  But the literary review can be expanded. Add links to the following articles. I hope everything will be fine with you.

1. Belloumi, M.; Alshehry, A. The Impacts of Domestic and Foreign Direct Investments on Economic Growth in Saudi Arabia. Economies 2018, 6, 18. https://doi.org/10.3390/economies6010018
2. Sarwar, S.; Streimikiene, D.; Waheed, R.; Dignah, A.; Mikalauskiene, A. Does the Vision 2030 and Value Added Tax Leads to Sustainable Economic Growth: The Case of Saudi Arabia? Sustainability 2021, 13, 11090. https://doi.org/10.3390/su131911090
3. Bollino, C.A.; Galkin, P. Energy Security and Portfolio Diversification: Conventional and Novel Perspectives. Energies 2021, 14, 4257. https://doi.org/10.3390/en14144257
4. Alkhateeb, T.T.Y.; Mahmood, H. Oil Price and Energy Depletion Nexus in GCC Countries: Asymmetry Analyses. Energies 2020, 13, 3058. https://doi.org/10.3390/en13123058
5. Haque, M.I. The Growth of Private Sector and Financial Development in Saudi Arabia. Economies 2020, 8, 39. https://doi.org/10.3390/economies8020039
6. Alodayni, S. Oil Prices, Credit Risks in Banking Systems, and Macro-Financial Linkages across GCC Oil Exporters.  J. Financial Stud. 2016, 4, 23. https://doi.org/10.3390/ijfs4040023
7. Agboola, M.O.; Bekun, F.V.; Balsalobre-Lorente, D. Implications of Social Isolation in Combating COVID-19 Outbreak in Kingdom of Saudi Arabia: Its Consequences on the Carbon Emissions Reduction. Sustainability 2021, 13, 9476. https://doi.org/10.3390/su13169476
8. Rahman, M.M.; Rahman, S.M.; Rahman, M.S.; Hasan, M.A.; Shoaib, S.A.; Rushd, S. Greenhouse Gas Emissions from Solid Waste Management in Saudi Arabia — Analysis of Growth Dynamics and Mitigation Opportunities.  Sci. 2021, 11, 1737. https://doi.org/10.3390/app11041737
9. Belloumi, M.; Alshehry, A. The Impact of International Trade on Sustainable Development in Saudi Arabia. Sustainability 2020, 12, 5421. https://doi.org/10.3390/su12135421

   Good luck to you.  

 

Comments for author File: Comments.pdf

Author Response

Dear referee

Hope you are doing fine. Thanks for your time which is highly appreciated. The comments list has been reviewed and your suggestion of the articles been applied on the following article

Haque, M.I. The Growth of Private Sector and Financial Development in Saudi Arabia. Economies 2020, 8, 39. https://doi.org/10.3390/economies8020039

This article has consistent variables with the study as variables similar, but in different manner. The result of the article has been contrasted with result of this study which has been discussed in the conclusion section. However, the rest of the articles will not contribute to the study as they are having different goals and different variables. However, two articles that have been in the list is already been discussed in the body of the study.

Sarwar, S.; Streimikiene, D.; Waheed, R.; Dignah, A.; Mikalauskiene, A. Does the Vision 2030 and Value Added Tax Leads to Sustainable Economic Growth: The Case of Saudi Arabia? Sustainability 2021, 13, 11090. https://doi.org/10.3390/su131911090

Belloumi, M.; Alshehry, A. The Impact of International Trade on Sustainable Development in Saudi Arabia. Sustainability 2020, 12, 5421. https://doi.org/10.3390/su12135421

Thanks for all comments you have stated and wish this clarification satisfy your concerns in the revision of the article. Again, thanks for your time and all your efforts are highly appreciated.

Author Response File: Author Response.pdf

Reviewer 2 Report

Review for the paper

The Linkage Between Oil and Non-oil GDP in Saudi Arabia

The novelty of the project is justified and consists in the option-adjusted spread analysis. However, neither the approach itself nor the listed elements are well-established, and therefore not only a clear description of them is required, but also a justification, first of all, of the necessity and sufficiency of their application in just such a quantity, sequence of application, interconnection, complementarity.

In this paper, authors used 43 sources, containing both historical and fundamental works, as well as the latest scientific research on this topic. But the literature review can be structured. The papers discussed many points of this study. Please, discuss these papers:

An, J., Mikhaylov, A. (2020). Russian energy projects in South Africa. Journal of Energy in Southern Africa, 31(3). http://dx.doi.org/10.17159/2413-3051/2020/v31i3a7809

Mutalimov, V., Kovaleva, I., Mikhaylov, A., & Stepanova, D. (2021). Assessing regional growth of small business in Russia. Entrepreneurial Business and Economics Review, 9(3), 119-133. https://doi.org/10.15678/EBER.2021.090308

At the same time, the above reflects the instrumental aspects, but the proposed tools are aimed at application, and therefore it is necessary to justify such an application to the selected object with the identification of its advantages in comparison with other methods used. In the absence of such information, the scientific novelty of the project seems unreasonable. Thus, the proposed tools are aimed at application, and therefore it is necessary to justify such an application to the selected object with the identification of its advantages in comparison with other methods used.

The comments presented above regarding novelty are valid for the analysis of the current state, therefore it seems that for a deep analysis of the current state, these comments should be eliminated. It is not clear how the effectiveness of the proposed method will be determined.

Authors need to add more details on the range of simulation considered in this work should be clearly outlined within the abstract and in Table 1-2. The current statements are vague and too general to get an idea of the work that have been accomplished.

Authors need to add more details on this particular works within citations [1-5].

Author Response

Dear referee

Hope you are doing fine. Thanks for your time which is highly appreciated. The following comment have been corrected in the article with highlighted in yellow.

Authors need to add more details on the range of simulation considered in this work should be clearly outlined within the abstract and in Table 1-2. The current statements are vague and too general to get an idea of the work that have been accomplished.

Authors need to add more details on this particular works within citations [1-5].

The aim of this study is to look for long run association between oil and non-oil GDP in Saudi Arabia. There are several econometrics methodologies to assess the time series like VAR, Johansen Cointegration and ARDL Cointegration. The article has stated the advantage of the method that leads to the goal of the study which is long run association among the variables in the model. However, the literature has some studies that suggested the use of ARDL Cointegration in this case.

Alkhathlan, K. Contribution of Oil in Economic Growth of Saudi Arabia. Applied Economics Letters, 2013, 20, 343-348. https://www.tandfonline.com/doi/abs/10.1080/13504851.2012.703310 .

Foudeh, M. The long run effects of oil prices on economic growth: the case of Saudi Arabia. International Journal of Energy Economics and Policy. 2017, 7(6), 171-192. https://www.econjournals.com/index.php/ijeep/article/view/5878 .

Sultan, Z.; Haque, M. Oil Exports and Economic Growth: An Empirical Evidence from Saudi Arabia. International Journal of Energy Economics and Policy. 2018, 8, 281-287. https://www.econjournals.com/index.php/ijeep/article/view/6688 .

The alternative to this methodology is the VAR, but the VAR has limitation where the lags have to be similar across the model. Furthermore, VAR does not have the property to assess the long run relationship which is the goal of the article.  However, VAR has great property in term analyzing shocks impact of variables to another variable. Also, variance decomposition can assess the impact of the variables on each other with specific restriction for specific period. Nether the less, those properties will answer part of the research question which is the impact of oil on non-oil GDP and will miss the linkage between the oil and non-oil GDP.        

The two articles have been reviewed and followed their way of describing the research question and the flow to the reach goal of the article. There is a statement has been added in the methodology paragraph to inform the reader why this methodology has been used to clarify your concern.

Thanks for all comments you have stated and wish this clarification satisfy your concerns in the revision of the article. Again, thanks for your time and all your efforts are highly appreciated.

Author Response File: Author Response.pdf