The Role of Technological Progress in the Distribution sector: Evidence from Saudi Arabia Wholesale and Retail Trade Sector*

Purpose: This study aims to identify the role of technological progress in the distribution sector in Saudi Arabia. Research design, data, and methodology: The study applies the Autoregressive Distributed Lag (ARDL) approach to estimate the Cobb Douglas production function of the wholesale and retail trade sector in Saudi Arabia, relied on annual data from the General Authority for Statistics from 2005 to 2019. Results: The results show that there is a long run relationship between the production of the wholesale and retail trade sector in KSA and the factors of production labour, capital and technology progress. The elasticity of the wholesale and retail trade production with respect to capital and labour are 0.26 and 0.78 respectively; the coefficients are positive and statistically significant. The wholesale and retail trade sector is operating under increasing returns to scale. The main result indicates that the elasticity of the wholesale and retail production with respect to the technology progress is 4.62%, which is positive and statistically significant. Conclusions: The study concluded that technological progress has a positive contribution to the growth of the distribution sector in KSA. Therefore, the technological progress can improve the productivity and efficiency of the resources allocated to the dis.