nep-ara New Economics Papers
on Arab World
Issue of 2010‒07‒17
eight papers chosen by
Quentin Wodon
World Bank

  1. Selected MENA Countries’ Attractiveness to G7 Investors By Fathi Abid; Slah Bahloul
  2. A cost-based empirical model of the aggregate price determination for the Turkish economy: a multivariate cointegration approach By Zeren, Fatma; Korap, Levent
  3. How Do Tourists React to Political Violence?: An Empirical Analysis of Tourism in Egypt By David Fielding; Anja Shortland
  4. Food security and economic development in the Middle East and North Africa By Breisinger, Clemens; van Rheenen, Teunis; Ringler, Claudia; Nin Pratt, Alejandro; Minot, Nicholas; Aragon, Catherine; Yu, Bingxin; Ecker, Olivier; Zhu, Tingju
  5. Commodity Prices and Inflation in the Middle East, North Africa, and Central Asia By Joseph Crowley
  6. The Impact of Avian Influenza on Vertical Price Transmission in the Egyptian Poultry Sector By Hassouneh, Islam; Radwan, Amr; Serra, Teresa; Gil, José M.
  7. Assessing food security in Yemen By Ecker, Olivier; Breisinger, Clemens; McCool, Christen; Diao, Xinshen; Funes, Jose; You, Liangzhi; Yu, Bingxin
  8. Intra-Firm Diffusion of Innovation: Evidence from Tunisian SME’s in Matters of Information and Communication Technologies By Adel Ben Youssef; Walid Hadhri; Hatem M’henni

  1. By: Fathi Abid (University of Sfax, Tunisia); Slah Bahloul
    Abstract: The objective of this paper is to evaluate the relative attractiveness of seven MENA countries (Algeria, Egypt, Iran, Saudi Arabia, Morocco, Tunisia and Turkey) as a location for foreign portfolio investment (FPI) from the G7 investors viewpoint. We suggest a methodology based on the combination of the gravity model, the Analytic Hierarchy Process (AHP) and the goal programming model (GP). The gravity model is used to determine the attractiveness factors of a country with respect to FPI for 30 investing and 43 receiving countries for the year 2001. Results show the importance of information costs and bilateral trade in the determination of the bilateral asset holdings. The AHP method is applied to prioritize the set of FPI location alternatives from the different viewpoints of G7 investors according to variables’ significance in the gravity model outcome; information costs, bilateral trade, investment freedom, GDP, institutional quality and geographic distance. Results for the year 2005 show that Saudi Arabia is the most attractive country for Japanese and American investors, Turkey is the favorite location for French, German, Italian and British investors and Algeria is the preferred destination for Canadian investors. A combined AHP-GP model has been used to determine the degree of portfolio investment in each MENA country from the viewpoint of G7 investors for the period 2003-2006. Results show that the relative attractiveness of MENA countries is time-varying but they have approximately the same degree of attractiveness from the G7 investor’s viewpoints. In general, the most attractive country for FPI is Turkey for all G7 investors and Saudi Arabia ranks second. For a MENA country to attract more FPI it should especially improve bilateral trade and institutional quality and reduce foreign investment restrictions and information costs.
    Date: 2010–07
  2. By: Zeren, Fatma; Korap, Levent
    Abstract: This paper tries to examine the long run relationships between the aggregate consumer prices and some cost-based components for the Turkish economy. Based on a simple economic model of the macro-scaled price formation, multivariate cointegration techniques have been applied to test whether the real data support the a priori model construction. The results reveal that all of the factors, related to the price determination, have a positive impact on the consumer prices as expected. We find that the most significant component contributing to the price setting is the nominal exchange rate depreciation. We also cannot reject the linear homogeneity of the sum of all the price data as to the domestic inflation. The paper concludes that the Turkish consumer prices have in fact a strong cost-push component that contributes to the aggregate pricing.
    Keywords: Aggregate consumer prices; Cointegration; Turkish economy;
    JEL: C32 E31
    Date: 2010
  3. By: David Fielding; Anja Shortland
    Abstract: This paper uses a detailed database of political violence in Egypt to study European and US tourists' attitudes towards travelling to a conflict region. We use time series analysis to study the heterogeneous impacts of different dimensions of political violence and counter-violence on tourist flows to Egypt in the 1990s. We find that both US and EU tourists respond negatively to attacks on tourists, but do not appear to be influenced by casualties arising in confrontations between domestic groups. However, European tourists are sensitive to the counter-violence measures implemented by the Egyptian government. There is also evidence of tourism in Egypt being affected by the Israeli / Palestinian conflict, with arrivals of tourists into Egypt rising when fatalities in Israel increase.
    Keywords: Tourism, political violence, Egypt
    JEL: P48 L83
    Date: 2010
  4. By: Breisinger, Clemens; van Rheenen, Teunis; Ringler, Claudia; Nin Pratt, Alejandro; Minot, Nicholas; Aragon, Catherine; Yu, Bingxin; Ecker, Olivier; Zhu, Tingju
    Keywords: Agriculture, Economic development, food security, Growth, health, Middle East and Northern African (MENA) region, Policy reform, trade, water,
    Date: 2010
  5. By: Joseph Crowley
    Abstract: Inflation followed a strikingly uniform pattern in all countries of the Middle East, North Africa, and Central Asia during the period 1996-2009, falling until about 2000 and then rising. International fuel prices do not help explain this pattern. This conclusion is robust even when different cross sections of countries are tested or when different regression variables are included. The pattern of inflation is explained mainly by past inflation, the strength of the US dollar, US inflation, and—depending on the subset of countries analyzed—monetary and exchange rate policies and nonfuel commodity prices.
    Keywords: Commodity prices , Cross country analysis , Dollarization , Economic models , Exchange rate policy , Exchange rates , Inflation , Middle East and Central Asia , Monetary policy , Money supply , North Africa , Oil prices , Time series ,
    Date: 2010–06–07
  6. By: Hassouneh, Islam; Radwan, Amr; Serra, Teresa; Gil, José M.
    Abstract: In recent years, health risks have received increasing attention among consumers and created interest in analysing the relationship between food scares, food consumption and market prices. One of the most relevant and recent food scares is the avian influenza that has had important effects not only on human and animal health, but also on the economy. We assess effects of avian influenza on price transmission along the Egyptian poultry marketing chain. Although Egypt has been one of the most affected countries by avian influenza, this article is the first attempt to understand this food scareâs impacts on Egyptian poultry markets. In doing so, a multivariate smooth transition vector error correction model (STVECM) is applied to monthly poultry price data. In order to reflect consumer awareness of the crisis, an avian influenza food scare information index is developed and used within the model as a transition variable. Our results suggest that price adjustments to deviations from the market equilibrium parity depend on the magnitude of the avian influenza crisis. Results also suggest that food safety information indices, that have been widely used to assess the economic impacts of food scare crises in developed countries, also contribute to understanding the economic effects of food scare crises in developing countries.
    Keywords: Food scare, avian influenza, price transmission, Egypt., Production Economics, C22, Q13,
    Date: 2010–03–29
  7. By: Ecker, Olivier; Breisinger, Clemens; McCool, Christen; Diao, Xinshen; Funes, Jose; You, Liangzhi; Yu, Bingxin
    Abstract: The lack of updated information about food security is of concern to many countries, especially during and after economic crises, natural disasters, and conflicts. In this paper we present an analytical framework for assessing the effects of such crises on food security. This methodology can compensate for the lack of recent data in the aftermath of various crisis situations and thus provide important information to policymakers. We apply this methodology to Yemen, a country where the recent food price crisis and global economic recession have been especially damaging. Little is known about how the recent triple crisis (food, fuel, and financial crisis) has affected food security and what the current state of food security is on the macro- (national) and microlevels (local). The results of our findings suggest an alarming state of food insecurity. Food security at the macrolevel has dramatically deteriorated in recent years, and it is projected that the country will remain highly vulnerable to external shocks in the future if no action is taken. At the household level we found that 32.1 percent of the population in Yemen is food insecure and that 57.9 percent of all children are malnourished. Rural-urban inequalities are high in Yemen. The number of food-insecure people living in rural areas (37.3 percent) is more than five times higher than in urban areas (17.7 percent). Underweight children and children with stunted growth are found more commonly in rural than urban areas. Major challenges for food security are the lack of job-creating growth within the oil-dependent economic structure; a distorted economic incentive system, coupled with an inefficient social transfer system rapidly depleting oil and water resources; and the growing production and consumption of qat.
    Keywords: food security, Middle East and Northern African (MENA) region, Poverty,
    Date: 2010
  8. By: Adel Ben Youssef (GREDEG and Univ. Nice Sophia-Antipolis); Walid Hadhri; Hatem M’henni
    Abstract: The aim of this paper is twofold: first, we want to explore the intra-firm diffusion of information and communication technologies (ICT) within the Tunisian firms and to characterize its general trends of adoption and usage. Second, we want to emphasize the rank and epidemic effects stressed by the disequilibrium models of intra-firm diffusion of innovation following the traditional view of (Mansfield, 1963, Antonelli 1985). Based on face-to-face questionnaires of a random sample of 175 firms our paper shows that: (i) three technological waves of ICT adoption are well characterized in the Tunisian manufacturing sector. This dynamic of adoption is linked to the age of the technologies. Time is the main explanatory variable for intra-firm diffusion of these technologies. (ii) A positive correlation between the size of the firm, seniority and the depth of adoption is found. These econometric estimates show that the rank effect is well characterized within the Tunisian firms. (iii) A positive correlation between technological absorptive capacity building and intensity of ICT usage is found. This correlation confirms the epidemic effect. (iv) Our results show that disequilibrium models’ explanations of intra-firm diffusion of innovation are valid within the Tunisian manufacturing sector and seem more appropriate than the equilibrium theory for developing countries.
    Date: 2010–07

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