nep-ara New Economics Papers
on Arab World
Issue of 2010‒04‒24
three papers chosen by
Quentin Wodon
World Bank

  1. Econometric analysis of the bilateral trade flows in the Gulf Cooperation Council countries By INSEL, Aysu; TEKCE, Mahmut
  2. The Demand for Military Spending in Egypt By Aamer S. Abu-Qarn; J Paul Dunne; Yasmine M. Abdelfattah; Shadwa Zaher
  3. Efficiency frontier and matching process on the labor market: Evidence from Tunisia By Drine, Imed; Bou Abid , Anis

  1. By: INSEL, Aysu; TEKCE, Mahmut
    Abstract: This study analyzes the trade flows of the Gulf Cooperation Council (GCC) both among its member countries and with the rest of the world for the 1997-2002 and 2003-2007 periods. In this paper, the research question is whether the trade flows of the GCC countries with their partners have sustained and/or they have developed new relations over time, mainly after the 2003 Customs Union agreement of the GCC. For this purpose, fixed effects models have been estimated in order to obtain individual country effects variable. Then, trade model as a function of distance and income variables and the country effects model as a function of the time invariant control variables have been estimated simultaneously within the panel analysis using the Least Squares and Generalised Method of Moments under the assumption of the presence of cross section heteroskedasticity and the robust standard errors. It has been found that: (1) The order of top fifteen trade partners has changed significantly from the EU countries and the US to the Asian countries after 2003. (2) Exports and imports of the GCC countries are related to the wealth of the partner countries, but not to their distance, mainly due to the nature of their exported and imported goods, the characteristic of the region and developments in transportation facilities.
    Keywords: Gulf Cooperation Council Countries; Trade Flows; Gravity model; Panel Analysis; System Estimation
    JEL: O53 F14 C33 C01
    Date: 2010–04–15
  2. By: Aamer S. Abu-Qarn (Economics Department,Ben-Gurion University, Israel); J Paul Dunne (Department of Economics, University of the West of England); Yasmine M. Abdelfattah (Department of Economics, British University in Egypt); Shadwa Zaher (Department of Economics, British University in Egypt)
    Abstract: Egypt plays a pivotal role in the security of the Middle East as the doorway to Europe and its military expenditure reflects its involvement in the machinations of such an unstable region, showing considerable variation over the last forty years. These characteristics make it a particularly interesting case study of the determinants of military spending. This paper presents such a study, estimating an econometric model of the Egyptian demand for military spending, taking into account important strategic and political factors. Both economic and strategic factors are found to play a role in determining military burden, with clear positive effects of lagged military burden, suggesting some sort of institutional inertia, plus negative output and net imports effects. The main strategic effect is the impact of Israel’s military burden, with no effect for that of the Jordanian and Syrian allies, but the results also suggest that simple arms race relationships are not an adequate representation of the relevant strategic factors.
    Keywords: Egypt, demand for military expenditure, political determinants, strategic determinants
    JEL: H56 O53
    Date: 2010–01
  3. By: Drine, Imed; Bou Abid , Anis
    Abstract: The purpose of this paper is to study the determinants of the inefficient functioning of the Tunisian labour market. The study takes advantage of the recent development in the stochastic frontier techniques and estimates, the matching function for Tunisia using disaggregated data. We include control variables as determinants of matching efficiency and regional disparities. We confirm that the persistently high rate of unemployment is the result of not only excess labour supply but is also related to a shortfall between supply and demand (sector, location, qualification).
    Keywords: labour market; structural unemployment; technical efficiency; matching across regions; developing country.
    JEL: C23 J64
    Date: 2010–01

This nep-ara issue is ©2010 by Quentin Wodon. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.