Driving economic growth in GCC countries: the power of diversification and the complexity of creative industries

This study examines the economic growth implications of creative industries in GCC countries, emphasising the necessity of diversifying creative product export baskets by transitioning towards higher-complexity products, enhancing production capabilities, and identifying potential export markets. Using data from 2003 to 2022, the research analyzes the dynamics, diversification levels and complexity of creative product exports in the GCC. It also employs the System Generalised Method of Moments estimator to investigate the causality between creative products and economic growth. The diversification level of creative product export baskets is measured using three indices—the Theil index, Gini coefficient and Herfindahl–Hirschman Index—reveals that these baskets are highly concentrated. The findings suggest that most creative products exported by GCC countries are of low complexity, which limits their potential to drive economic growth. While the UAE leads in total exports, Qatar—despite having the lowest export volume—has a higher share of complex products. The results indicate that diversification has a positive impact on economic growth, supporting the diversification-led growth hypothesis. The study recommends that GCC countries diversify the intensive margin of their creative product baskets by increasing the share of active, complex products, thereby boosting both diversification and complexity, thus promoting economic growth.