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Volume :20 Issue : 78 1995      Add To Cart                                                                    Download

THE ROLE OF MANUFACTURING INDUSTRIES IN SAUDI ARABIA AND GOVERNMENT SUBSIDY

Auther : By: Dr. Wanis Abdel Aal

The aim of this research is to study the role of manufacturing industries in the Kingdom of Saudi Arabia and evaluation of the performance of large firms. It also to discuss the industries possessing economies of scale. It was concluded that Saudi Manufacturing Industries have considerably grown over the last fifteen years, also they have benefited from technical factors; services availability and exporting markets. The Empirical investigation showed that the large industrial firms have experienced capital capacity, and these firms are performing in an increasing returns to scale. It is also shown that as long as internal consumer surplus (resulted from domestic production minus losses) exceeds consumer surplus resulted from importing, thus government subsidy for these firms found its justifications. Therefore, one can argue that encouraging domestic firms is given to those industries contributing in internal jobs creation. Also, the government subsidy has to be related to industry ability in providing job opportunities.

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