nep-ara New Economics Papers
on Arab World
Issue of 2011‒08‒09
nine papers chosen by
Quentin Wodon
World Bank

  1. Of Religion and Redemption: Evidence from Default on Islamic Loans By Baele, Lieven; Farooq, Moazzam; Ongena, Steven
  2. An empirical model for the Turkish trade balance: new evidence from ARDL bounds testing analyses By Korap, Levent
  3. Why does the productivity of education vary across individuals in Egypt ? firm size, gender, and access to technology as sources of heterogeneity in returns to education By Herrera, Santiago; Badr, Karim
  4. The"resource curse"in MENA ? political transitions, resource wealth, economic shocks, and conflict risk By Ross, Michael; Kaiser, Kai; Mazaheri, Nimah
  6. Supply-based Dynamic Ramsey Pricing with Two Sectors: Avoiding Water Shortages By Sağlam, Yiğit
  7. Food security in Syria: Preliminary results based on the 2006/07 expenditure survey By Wendler, Cordula; von Cramon-Taubadel, Stephan; de Haen, Hartwig; Padilla Bravo, Carlos Antonio; Jrad, Samir
  8. Informality and protection from health shocks : lessons from Yemen By Cho, Yoonyoung

  1. By: Baele, Lieven; Farooq, Moazzam; Ongena, Steven
    Abstract: Do religious beliefs affect real economic decisions? We investigate this fundamental question by comparing default rates on conventional and Islamic loans using a comprehensive monthly dataset from Pakistan that follows more than 150,000 loans over the period 2006:04 to 2008:12. We find robust evidence that the default rate on Islamic loans is less than half the default rate on conventional loans. The evidence comes from a variety of specifications that contain pertinent combinations of time-varying borrower, loan contract and bank characteristics, and time, borrower, bank and borrower*bank fixed effects. For the same borrower taking both conventional and Islamic loans from the same bank, the hazard rate on Islamic loans drops to one fifth the hazard rate on conventional loans. Islamic loans are less likely to default during Ramadan and in big cities if the share of votes to religious-political parties increases, suggesting that religion--either through individual piousness or network effects--may play a role in determining loan default.
    Keywords: Duration Analysis; Islamic Loans; Loan Default; Religion
    JEL: A13 G21 G32 G33 Z12
    Date: 2011–08
  2. By: Korap, Levent
    Abstract: In this paper, the determinants of the Turkish trade balance are tried to be analyzed in an empirical modelling approach. For this purpose, the contemporaneous ARDL-based bounds testing has been used to examine the existence of a long run co-integration relationship between the variables of our interest. The estimation results indicate that real exchange rate depreciations improves the trade balance in a strong and significant way, that domestic real income affects the trade balance negatively, and that trade balance is strongly improved due to an increase in foreign real income. No significant effect of crude oil prices can be observed on trade balance. The error correction modeling gives results in line with the long run findings of the co-integration analysis.
    Keywords: Trade Balance; ARDL Bounds Testing Approach; Turkish Economy;
    JEL: C32 F10 F41
    Date: 2011
  3. By: Herrera, Santiago; Badr, Karim
    Abstract: The paper estimates the rates of return to investment in education in Egypt, allowing for multiple sources of heterogeneity across individuals. The paper finds that, in the period 1998-2006, returns to education increased for workers with higher education, but fell for workers with intermediate education levels; the relative wage of illiterate workers also fell in the period. This change can be explained by supply and demand factors. On the supply side, the number workers with intermediate education, as well as illiterate ones, outpaced the growth of other categories joining the labor force during the decade. From the labor demand side, the Egyptian economy experienced a structural transformation by which sectors demanding higher-skilled labor, such as financial intermediation and communications, gained importance to the detriment of agriculture and construction, which demand lower-skilled workers. In Egypt, individuals are sorted into different educational tracks, creating the first source of heterogeneity: those that are sorted into the general secondary-university track have higher returns than those sorted into vocational training. Second, the paper finds that large-firm workers earn higher returns than small-firm workers. Third, females have larger returns to education. Female government workers earn similar wages as private sector female workers, while male workers in the private sector earn a premium of about 20 percent on average. This could lead to higher female reservation wages, which could explain why female unemployment rates are significantly higher than male unemployment rates. Formal workers earn higher rates of return to education than those in the informal sector, which did not happen a decade earlier. And finally, those individuals with access to technology (as proxied by personal computer ownership) have higher returns.
    Keywords: Access&Equity in Basic Education,Teaching and Learning,Education For All,Primary Education,Labor Markets
    Date: 2011–07–01
  4. By: Ross, Michael; Kaiser, Kai; Mazaheri, Nimah
    Abstract: The recent political upheavals in the Middle East and North Africa region have exposed growing concerns about conflict risk, political stability, and reform prospects across its societies. Given the prevalence of oil and gas resource endowments in the region, which a voluminous literature suggests can be associated with adverse development consequences, this paper examines the interplay between their associated rents and political economy trajectories. The contribution of the paper is threefold: first, to examine the quantitative evidence of violent conflict in the region since 1960; second, to provide a nuanced review of the regional case study literature on the relationship between resource endowments, political stability, and conflict risk; and third, to assess how prospective political transitions have implications for the World Bank Group's work in the region on public sector management and private sector development. The authors find that resources and regimes have intersected to provide stability and limited violent conflict in the region, but that these development patterns have yielded a set of policy choices and development patterns that are proving increasingly brittle and unsustainable. A major institutional challenge for reforms will be to consolidate a requisite degree of inter-temporal credibility and stability in these regimes, while expanding inclusiveness in state-society relations.
    Keywords: Environmental Economics&Policies,Post Conflict Reconstruction,Economic Theory&Research,Labor Policies,Emerging Markets
    Date: 2011–07–01
  5. By: Shahram Salavati (Faculty of business administration, Islamic Azad University, Tonekabon Branch, Iran); Noor Hazarina Hashim (Faculty of Management and Human Resource Development, Universiti Teknologi Malaysia)
    Abstract: This study investigates website adoption and performance among Iranian hotels. Using content analysis technique, this study identifies the presence of 28 website features on 57 Iranian hotels. The results found Iranian hotels are at very early stage of Internet adoption. E-commerce activities are very minimal among the Iranian hotels as none of the hotels provide online reservation. This study adds to the limited study of e-commerce and hospitality in Iran.
    Keywords: E-tourism, Website, Evaluation, Hotel, Iran
    JEL: M0
    Date: 2011–03
  6. By: Sağlam, Yiğit
    Abstract: In many countries, current water-pricing policies are dictated by the sole objective of breaking-even in each period. This results in large withdrawals, which are not sustainable in the long-run, hence not optimal. In this paper, I derive the optimal dynamic water resource management policy of a benevolent government, which supplies water to households and agriculture. I compare the efficiency implications of the current and the optimal pricing policies using simulations. I endogenize crop-choice decisions and estimate the changes in the crop composition with the generalized method of moments. Using data from Turkey, I nd that, under the policy of break-even prices, the average number of years before the government runs into the water shortage, when it cannot meet the sectoral demands, is eight years. In contrast, if the government were to choose water prices optimally, then water shortages would be practically nonexistent over the next century.
    Keywords: Ramsey Pricing, Water Shortages, Water Pricing, Dynamic Programming, Irrigation,
    Date: 2011–02–18
  7. By: Wendler, Cordula; von Cramon-Taubadel, Stephan; de Haen, Hartwig; Padilla Bravo, Carlos Antonio; Jrad, Samir
    Abstract: --
    Date: 2011
  8. By: Cho, Yoonyoung
    Abstract: The informal sector is generally believed to be more vulnerable to various risks due to limited access to social insurance, but little empirical evidence exists to support this statement. This paper examines the relationship between informality and protection from health risks in Yemen. The formal sector, when defined based on pension coverage, largely overlaps with public employment where the better educated, more experienced, and better informed tend to work. The results indicate that, even after accounting for socio-economic status, water supply and quality conditions, risky behavior patterns, and unobserved heterogeneity, formal sector households have better accessibility and affordability to health service. This may in part explain better health outcomes among formal households, although large heterogeneity across regions (urban/rural) exists. However, the role of the existing health insurance is found to be unclear. The findings reconfirm the importance of policies that promote universal access to health service and a risk pooling avenue delinked from employment types as well as healthy living conditions and lifestyles.
    Keywords: Health Monitoring&Evaluation,Health Systems Development&Reform,Safety Nets and Transfers,Labor Markets,Health Economics&Finance
    Date: 2011–08–01
  9. By: Walid A. Al-Husaini; Sadek M. Al-Bassam; Ahmed E. Hamdallah; Mohamed A. El-Azma (Department of Accounting, College of Business Administration, Kuwait University)
    Abstract: The purpose of this study is to investigate perceptions of top managers of Kuwaiti companies regarding factors the affect their companies’ decision to distribute stock dividend ( SD ). A questionnaire listing 32 reasons that could explain companies’ decisions to declare SDs was distributed to a sample of 120 randomly selected top managers from 100 Kuwaiti companies and 73 responses were received (representing a 61% response rate ). Participants were classified according to: ( 1 )business sector ( investment, real estate, banking, service, and industrial ) and ( 2 ) size of SDs ( small ( less than 25% ) and large ( 25% or more )). Nonparametric statistical tests were employed to analyze the data.
    Keywords: Stock Dividends, Importance Ratings, Trading Liquidity, Institutional Investors
    JEL: M0
    Date: 2011–03

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