Estimating total factor productivity in the Saudi Arabia construction sector

Keywords: Saudí Arabia, Total Factor Productivity, Construction Sector, Cobb Douglas production function.

Abstract

The study aims to estímate the total factor productivity in Saudi Arabia construction sector. Using Cobb Douglas production function. The results showed that that there is a long-run equilibrium relationship between the value of production and the factors of production labour  and capital. The study also showed that the coefficient of labour  is positive with a value of 0.015. While the elasticity of production with respect to capital is about 0.42 the elasticity of production with respect to the capital component is greater than the labour  component and the construction sector in KSA operates in light of decreasing returns to scale (DRS). The results indicates that the construction sector in Saudi Arabia during the coming years will witness a positive growth rate with interest in strengthening the partnership between the government and the private sector in order to develop the construction sector. The study also recommends expanding the production process within the construction sector and moving towards research and development in the field of construction and working to increase investment in the human capital component by training employment and encouragement of investment, in addition to, loans facilitates to the construction sector.

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Author Biographies

Jumah Ahmad Alzyadat, Dar Aluloom University, Riyadh, KSA, Saudi Arabia.

Assistant Professor, Department of Finance and Banking, College of Business Administration, Dar Aluloom University, Riyadh, KSA, Saudi Arabia.

Abdulrahman Fahad Alotaibi, Dar Aluloom University, Riyadh, Saudi Arabia.

MBA Student, College of Business Administration, Dar Aluloom University, Riyadh, Saudi Arabia.

Abdulaziz Hamad Almubdel, Dar Aluloom University, Riyadh, Saudi Arabia.

MBA Student, College of Business Administration, Dar Aluloom University, Riyadh, Saudi Arabia.

Nasser Abdullah Alrshaid, Dar Aluloom University, Riyadh, Saudi Arabia.

MBA Student, College of Business Administration, Dar Aluloom University, Riyadh, Saudi Arabia.

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Published
2021-05-31
How to Cite
Alzyadat, J. A., Alotaibi, A. F., Almubdel, A. H., & Alrshaid, N. A. (2021). Estimating total factor productivity in the Saudi Arabia construction sector. Amazonia Investiga, 10(40), 45-53. https://doi.org/10.34069/AI/2021.40.04.5
Section
Articles