nep-ara New Economics Papers
on Arab World
Issue of 2011‒02‒26
eleven papers chosen by
Quentin Wodon
World Bank

  1. What Drives the Performance of Selected MENA Banks? A Meta-Frontier Analysis By Hichem Ben-Khedhiri; Barbara Casu; Sami Ben Naceur
  2. Worthy Transfers? A Dynamic Analysis of Turkey's Accession to the European Union By Gul Ertan Ozguzer; Luca Pensieroso
  3. A Sectoral Approach to the Surging Imports in Turkey By Gul Ertan Ozguzer; Alper Duman
  4. Food and energy prices, government subsidies and fiscal balances in south Mediterranean countries By Albers, Ronald; Peeters, Marga
  5. The Impact of Oil Prices in Turkey on Macroeconomics By Aktas, Erkan; Özenç, Çiğdem; Arıca, Feyza
  6. Wind Energy in Egypt: Economic Feasibility for Cairo By Yasmina Hamouda
  7. An Estimated Dynamic Stochastic General Equilibrium Model of the Jordanian Economy By Tigran Poghosyan; Samya Beidas-Strom
  8. Firm's information environment and stock liquidity: evidence from Tunisian context By Loukil, Nadia; Yousfi, Ouidad
  9. Vertical Specialisation and Regional Trade Integration. A Study on Italy and Northern African Countries By Giancarlo Corò; Marco Giansoldati; Mario Volpe
  10. Labor productivity and energy use in a three sector model: An application to Egypt By Rudiger von Arnim and Codrina Rada
  11. Does OPEC still exist as a cartel? An empirical investigation By Vincent Bremond; Emmanuel Hache; Valérie Mignon

  1. By: Hichem Ben-Khedhiri; Barbara Casu; Sami Ben Naceur
    Abstract: This study examines the effect of financial-sector reform on bank performance in selected Middle Eastern and North African (MENA) countries in the period 1994 -2008. We evaluate bank efficiency in Egypt, Jordan, Morocco, Lebanon and Tunisia by means of Data Envelopment Analysis (DEA) and we employ a meta-frontier approach to calculate efficiency scores in a cross-country setting. We then employ a second-stage regression to investigate the impact of institutional, financial, and bank specific variables on bank efficiency. Overall, the analysis shows that, despite similarities in the process of financial reforms undertaken in the five MENA countries, the observed efficiency levels of banks vary substantially across markets, with Morocco consistently outperforming the rest of the region.Differences in technology seem to be crucial in explaining efficiency differences. To foster banking sector performance, policies should be aimed at giving banks incentives to improve their risk management and portfolio management techniques. Improvements in the legal system and in the regulatory and supervisory bodies would also help to reduce inefficiency.
    Keywords: Banking sector , Cross country analysis , Economic models , Egypt , Jordan , Lebanon , Middle East , Morocco , North Africa , Tunisia ,
    Date: 2011–02–14
  2. By: Gul Ertan Ozguzer (Department of Economics, Izmir University of Economics); Luca Pensieroso (Department of Economics, IRES - Universite catholique de Louvain)
    Abstract: We build a two-country dynamic general equilibrium model to study whether European citizens would benet from the eventual accession of Turkey to the European Union. The results of the simulations show that Turkey's accession to the European Union is welfare enhancing for Europeans, provided that Turkish total factor productivity (TFP) increases suciently after enlargement. In the model with no capital mobility, the Europeans are better o if the Turkish TFP increase bridges more than 31% of the initial TFP gap between Turkey and the European Union. That gure becomes 45% when capital mobility is introduced.
    Keywords: European Union, Turkey, Enlargement, Dynamic General Equilibrium, Open Economy Macroeconomics
    JEL: F41
    Date: 2010–10
  3. By: Gul Ertan Ozguzer (Department of Economics, Izmir University of Economics); Alper Duman (Department of Economics, Izmir University of Economics)
    Abstract: The dramatic surge in imports of goods and services without a concomitant surge in exports in Turkey deserves a sound explanation. The studies on the issue addressed increasing import dependency of the manufacturing sector in Turkey. This paper has attempted to scrutinize the reasons behind this phenomenon by looking not only at the manufacturing sector as the past studies did, but also at the other sectors of the economy. Using 1998 and 2002 Input -Output Tables, import requirement ratios have been calculated for 12 aggregate sectors. The results demonstrate that the contribution of the “wholesale and retail trade; repair of motor vehicles and household goods” sector to the increasing import dependency, hence to significantly rising imports, is greater than that of the manufacturing sector.
    Keywords: Input-Output Model, import requirement ratio, sector analysis, Turkey
    JEL: C67 F14
    Date: 2010–10
  4. By: Albers, Ronald; Peeters, Marga
    Abstract: Just before the global crisis soaring commodity prices pushed up inflation significantly, not least in EU neighbour countries at the Mediterranean. These price shocks affected public finances in the southern Mediterranean region, notably via government subsidies. Partly due to lags in the transmission of commodity prices into prices for final users the subsidies burden continued to be felt, despite the price falls registered in the wake of the credit crisis. We show that downward price rigidities play a role. Recently, commodity price pressures have re-emerged. We focus on food prices and analyse recent developments in food inflation in Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories, Syria and Tunisia in comparison with other middle income economies. Subsidies on food and fuel are quantified per country for the period 2002-2010. The incremental government subsidies entail an estimated deterioration of the government balances of up to more than 2% of GDP in 2008 and, for most countries only slight improvements in the global recession year 2009. Ensuing longer-term challenges for public finances remain as inflation rises on the back of higher global economic growth. As recent events in Tunisia and Egypt illustrate, these can have important political implications. Finally, the paper discusses some options that can lead to more efficient government spending, even in the event of sharp swings in prices of basic necessities.
    Keywords: food prices; energy prices; inflation; public finances; government subsidies
    JEL: E62 L71 L66 H2 E3
    Date: 2011–01
  5. By: Aktas, Erkan; Özenç, Çiğdem; Arıca, Feyza
    Abstract: This study explores the impact of fluctuations in oil prices on Turkey's economy. The data used in this study covers the years from 1991 to 2008. Macro-economic variables used in this study are GNP, inflation, unemployment and the ratio of exports to imports. VAR model is used in estimating the macro-economic impact of oil prices. Based on the results of the analysis conducted, a meaningful relationship of oil prices with inflation, unemployment and the ratio of exports to imports is estimated. However, it is observed that a rise in oil prices do not have any substantial impact on macro-economic variables. While an inverse relationship of oil prices with the ratio of exports to imports and unemployment is estimated, a direct relationship between oil prices and inflation emerged. The results of impulse-response analysis shows that the responses of macro-economic variables to oil price shocks become stable only after one year.
    Keywords: Oil prices; VAR; Macroeconomics; Turkey
    JEL: C32 E6
    Date: 2010–02–18
  6. By: Yasmina Hamouda (Faculty of Management Technology, The German University in Cairo)
    Abstract: Motivated by the rise of the electricity tariffs applied on industrial customer and the frequent electricity cut offs recently experienced in Egypt, this paper assesses the economic feasibility of installing a stand alone wind energy technology by an industrial customer who seeks to reduce his dependency on the national grid. For this purpose, the wind energy potential at the wind regime of Cairo was chosen to be assessed using half an hour wind speed data for a full one-year period (2009). The Weibull parameters of the wind speed distribution function were estimated by employing the maximum likelihood approach. The estimation revealed that Cairo has poor wind resources. Despite the poor resources, the financial analysis has shown that under certain parameters the wind project can prove to be financially viable. Thus harnessing wind energy through stand alone systems can help in meeting the industries electric power needs.
    Keywords: Renewable energy, wind resources, Weibull distribution, electricity
    JEL: Q42 O22 N77
    Date: 2011–02
  7. By: Tigran Poghosyan; Samya Beidas-Strom
    Abstract: This paper presents and estimates a small open economy dynamic stochastic general-equilibrium model (DSGE) for the Jordanian economy. The model features nominal and real rigidities, imperfect competition and habit formation in the consumer’s utility function. Oil imports are explicitly modeled in the consumption basket and domestic production. Bayesian estimation methods are employed on quarterly Jordanian data. The model’s properties are described by impulse response analysis of identified structural shocks pertinent to the economy. These properties assess the effectiveness of the pegged exchange rate regime in minimizing inflation and output trade-offs. The estimates of the structural parameters fall within plausible ranges, and simulation results suggest that while the peg amplifies output, consumption and (price and wage) inflation volatility, it offers a relatively low risk premium.
    Keywords: Income , Monetary policy , Exchange rate depreciation , Exchange rate appreciation , Economic models , External shocks , Demand , Oil prices , Price adjustments , Wage policy , Consumption , Exchange rate policy ,
    Date: 2011–02–02
  8. By: Loukil, Nadia; Yousfi, Ouidad
    Abstract: This paper analyzes the relationship between public disclosure, private information and stock liquidity in the Tunisian market. We use a sample of 41 listed firms in the Tunis Stock Exchange in 2007. First, we find no evidence that there is a relation between public and private information. Second, Tunisian investors do not trust the information disclosed in both annual reports and web sites, consequently it has no effects on stock liquidity, in contrast with private information.
    Keywords: corporate information disclosure; private information; stock liquidity; emerging market.
    JEL: G14 M41 G10
    Date: 2010–01
  9. By: Giancarlo Corò (Department of Economics, University Of Venice Cà Foscari); Marco Giansoldati (Department of Economics, University Of Venice Cà Foscari); Mario Volpe (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper uses a multistage approach to investigate the role of Italy in the Northern African countries, both in terms of trade and investment. In particular, we show that Italian import flows for two typically Made in Italy industries, namely textile and clothing on one hand, and leather and footwear on the other hand, are strongly related not only to export flows of the same sector, but also to a set of variables capturing features of the Italian and the foreign country. In this way, we supply a first result supporting the hypothesis of an international fragmentation of production. To offer this outcome additional strength, we endow the present contribution with information on the attractiveness of the Northern African countries, looking at the volume of inward FDI flows and stocks, but with no industry disaggregation, due to data unavailability. Although we start from a global perspective, we rapidly shift to consider only the Italian investments in the area, with a breakdown by outward region. Thanks to the availability of a detailed dataset made available by the Bank of Italy, we are able to provide further evidence on the Italian internationalisation in the North of Africa. Indeed, our second result highlights the remarkable heterogeneity across countries and the emergence of the major role played by Tunisia.
    Keywords: Northern Africa, Italian regions, Made in Italy, FDI, fragmentation, Global Value Chains
    JEL: F14 F21 F23 L67
    Date: 2011
  10. By: Rudiger von Arnim and Codrina Rada
    Abstract: This paper presents a model of a developing economy with three sectors---a modern sector producing manufactures and services, a traditional sector producing agricultural goods, and a third sector providing energy. Modern and energy sector are assumed to be demand--constrained; the agricultural sector is supply--constrained. Simulation exercises confirm insights of existing theory on structural heterogeneity: A price--clearing agricultural sector can impose an inflationary barrier on growth. Further, emphasis is placed on the sources of productivity growth. Specifically, higher energy intensity rather than increases in energy productivity enable labor productivity growth, with the attendant complications for 'green growth'.
    Keywords: Structural heterogeneity, Multi-sector model, Energy use JEL Classification: O41, Q43, C63
    Date: 2011
  11. By: Vincent Bremond; Emmanuel Hache; Valérie Mignon
    Abstract: The aim of this paper is to determine if OPEC acts as a cartel by testing whether the production decisions of the different countries are coordinated and if they have an influence on oil prices. Relying on cointegration and causality tests in both time series and panel settings, our findings show that the OPEC influence has evolved through time, following the changes in the oil pricing system. While the influence of OPEC is found to be important just after the counter-oil shock, our results show that OPEC is price taker on the majority of the considered sub-periods. Finally, by dividing OPEC between savers and spenders, we show that it acts as a cartel mainly with a subgroup of its members.
    Keywords: Oil prices, oil production, OPEC, cartel, cointegration, causality.
    JEL: C22 C23 L11 Q40
    Date: 2011

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