The Impact of Economic Diversification on Economic Growth in the Sultanate of Oman during the Period (1991-2021)

Abstract

Purpose: The purpose of the study was to provide a comprehensive overview of economic diversity and economic growth in Oman by measuring the degree of economic diversity and its development, analyzing and measuring the impact of diversification of government revenues, and diversification of gross domestic product on economic growth in Oman during the period (1991-2021).

Theoretical framework: Studies have shown mixed results, as some largely agree with Ricardo's theory of comparative advantage, which sees specialization (reducing economic diversity) as a stimulus and a source of economic growth. On the other hand, there are many studies that have shown that reducing economic diversity has a negative impact on economic growth.

Design/methodology/approach: The methodology used descriptive and analytical methods to cover the theoretical aspect, and standard methods were used to analyze the data to find the effect of independent variables on the dependent variable.

Finding: The study showed that Oman was able to achieve two goals together, namely achieving progress in economic diversification in conjunction with achieving an increase in economic growth rates. The study also showed a significant impact of economic diversification on the growth of Oman's gross domestic product, and that (83.69%) of the changes in economic growth are attributable to changes in the degree of economic diversification.

Practical and Social Implications: The research, scientific, and social implications suggest continuing to work on increasing economic diversification in order to ensure economic stability and increase economic growth rates.

Originality/value: The study on provides insight for authorities in Oman and researchers on the importance of continuing to achieve and implement economic diversification programs and strategies. It is necessary for Oman to adopt more policies to increase economic diversification and reduce the contributions of the oil sector.