Locational analysis of the Saudi manufacturing sector

Abstract EN

The main objective of this paper is to apply the Economic Base Theory to the manufacturing sector in Saudi Arabia.

This paper analyzes and describes the distribution and spatial concentration of Saudi industries among different regions in the country.

Three important issues are considered in this study: 1- The distribution of Saudi industries and the achievement of optimal allocation of available resources.

2- The distribution of industrial investment and its relation to regional differences.

3- The comparison of different regions in terms of industrial structure and different industries in terms of spatial distribution.

The statistical analysis shows that the top three Saudi regions in number of factories, capital financing, and employment are Riyadh, Makkah, and the Eastern region, whereas, the last one is the Northern region.

Among the main conclusions of this study is that Riyadh region is the main exporter in the Kingdom of some products such as textile and leather, and the main importer of others such as food and beverages.

Moreover, the empirical results indicate that one-third of internal trade in Saudi Arabia passes through Riyadh, one-quarter through the Eastern region and one-fifth through Makkah.

Finally, the study shows the necessity of redistributing industrial investments among Saudi regions more equitably.