nep-ara New Economics Papers
on Arab World
Issue of 2010‒04‒04
six papers chosen by
Quentin Wodon
World Bank

  1. Interdependencies of Health, Education & Poverty in Egypt, Morocco and Turkey Using Demographic and Health Survey By Driouchi, Ahmed; Baijou, Ahmad
  2. Islamic Finance:Sructure-objective mismatch and its consequences By Hasan, Zubair
  3. On the influence of oil prices on stock markets: Evidence from panel analysis in GCC countries. By Christophe Rault; Mohamed El Hedi AROURI
  4. Do Islamic banks have greater market power? By Weill, Laurent
  5. Oil prices and stock markets: what drives what in the Gulf Corporation Council countries? By Christophe Rault; ohamed El Hedi AROURI
  6. Failure of Participation & “Missing Women” in South Mediterranean Economies By Driouchi, Ahmed

  1. By: Driouchi, Ahmed; Baijou, Ahmad
    Abstract: The interdependencies of health, education and poverty that are common knowledge to individuals are also present at the aggregate levels of countries and internationally. The assessment of these interdependencies is the central task of this research but based on the Demographic Health Surveys (DHS) of Egypt, Morocco and Turkey. The results attained through dependency tests and probit models, confirm the existence of major interdependencies at the levels of households. These findings support the need for accelerating and developing further integrated and transversal economic and social policies.
    Keywords: Interdependencies; Health; Education; Poverty; Egypt; Turkey; Morocco.
    JEL: D31
    Date: 2009–11–28
  2. By: Hasan, Zubair
    Abstract: This paper raises the issue of an initial structure-objective mismatch in the launching of Islamic finance. The abolition of interest and promotion of growth with equity were goals of the conceived system. These goals expressed a long run vision to improve the condition of the Muslim communities across the world. However, the organizational form adopted for Islamic finance was of the existing commercial banks which provided essentially short-term loans on interest to trade industry and commerce. The choice thus involved an intrinsic mismatch between the structure and objectives of Islamic finance. The mismatch did carry some advantages, but on a more important side it exposed Islamic finance to commitments and influences which could not mostly align well with the goals the pioneers had in mind. Note that in focus here is not the reversal of the mismatch but its consequences that have forced the nascent Islamic system to convergence and competition with the mature conventional finance the West dominates. It is not the ground realities that are being adapted to Shari’ah norms; it is the norms that are being stretched to limit for meeting the demands of the conventional system. Ordinary Muslims who hoped to benefit from Islamic financing remain unattended. Thus, what Islamic finance can or cannot change will depend on where its ongoing integration with the conventional system leads it to. Currently, most merits claimed for the Islamic system defy evidence. The basic reforms financial systems require in the face of current crisis are the control of credit, leverage lure, and speculation. Islamic finance is in principle better equipped to achieve these ends.
    Keywords: Keywords: Islamic finance; convergence; Shari’ah compliance; credit creation; leverage; derivatives; financial crisis
    JEL: E51 E42 E50 E44
    Date: 2010–01
  3. By: Christophe Rault; Mohamed El Hedi AROURI
    Abstract: This paper implements recent bootstrap panel cointegration techniques and Seemingly Unrelated regression (SUR) methods to investigate the existence of a long-run relationship between oil prices and Gulf Corporation Countries (GCC) stock markets. Since GCC countries are major world energy market players, their stock markets are likely to be susceptible to oil price shocks. Using two different (weekly and monthly) datasets covering respectively the periods from 7 June 2005 to 21 October 2008, and from January 1996 to December 2007, our investigation shows that there is evidence for cointegration of oil prices and stock markets in GCC countries, while the SUR results indicate that oil price increases have a positive impact on stock prices, except in Saudi Arabia.
    Keywords: GCC stock markets, oil prices, panel cointegration analysis
    JEL: G12 F3 Q43
    Date: 2009–06–01
  4. By: Weill, Laurent (BOFIT)
    Abstract: The aim of this paper is to investigate whether Islamic banks have greater market power than con-ventional banks. An Islamic bank, for example, might enjoy enhanced market power if a captive clientele adhering to religious principles permits it to charge higher prices. To measure market power, we compute Lerner indices for a sample of banks from 17 countries where Islamic and conventional banks coexist. Comparison of Lerner indices shows no significant difference between Islamic banks and conventional banks over the period 2000-2007. When including control variables, regression of Lerner indices even suggests that Islamic banks have less market power than conventional banks. A robustness check with the Rosse-Panzar model confirms that Islamic banks are no less competitive than conventional banks. Thus, any reduced market power of Islamic banks can be attributed to differences in norms and incentives.
    Keywords: Islamic banks; Lerner index; bank competition
    JEL: D43 D82 G21
    Date: 2010–02–26
  5. By: Christophe Rault; ohamed El Hedi AROURI
    Abstract: In the empirical literature, only few studies have focused on the relationship between oil prices and stock markets in net oil-importing countries. In net oil-exporting countries this relationship has not been widely researched. This paper implements the panel-data approach of Kónya (2006), which is based on SUR systems and Wald tests with country-specific bootstrap critical values to study the sensitivity of stock markets to oil prices in GCC (Gulf Corporation Council) countries. Using two different (weekly and monthly) datasets covering respectively the periods from 7 June 2005 to 21 October 2008, and from January 1996 to December 2007, we show strong statistical evidence that the causal relationship is consistently bi-directional for Saudi Arabia. Stock market price changes in the other GCC member countries do not Granger cause oil price changes, whereas oil price shocks Granger cause stock price changes. Therefore, investors in GCC stock markets should look at the changes in oil prices, whereas investors in oil markets should look at changes in the Saudi stock market.
    Keywords: GCC stock markets, oil prices
    JEL: G12 F3 Q43
    Date: 2009–06–01
  6. By: Driouchi, Ahmed
    Abstract: This paper aims at showing that women are “missing” because also of their limited participation in development. It also intends to show that market mechanisms as well as limited alternative institutions are among the factors that negatively affect access to health, to education and to economic opportunities. The emphasis is placed on South Mediterranean countries. The results attained and the evidence mobilized consistently show the interdependencies of health, education and poverty and the potential gains that can be transversally achieved with the promotion of the roles of women and children.
    Keywords: Interdependencies; Health; Education; Poverty; missing women; children; South
    JEL: D63
    Date: 2009–12–15

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