nep-ara New Economics Papers
on Arab World
Issue of 2012‒01‒25
nine papers chosen by
Quentin Wodon
World Bank

  1. Resurgence of Selective Industrial Policy: What Turkey Needs By Gokhan Yilmaz
  2. Should Turkey Adopt GM Crops? A Social Multi-Criteria Evaluation for the Case of Cotton Farming in Turkey By Cem Iskender Aydin; Gokhan Ozertan; Begum Ozkaynak
  3. Comparative Essay on Returns to Education in Palestine and Turkey By Aysit Tansel; Yousef Daoud
  4. Privatization and regional distribution of manufacturing in Turkey By Fatma Dogruel; Suut Dogruel
  5. No Appealing Future For High Growth – Low Profitability Firms: Evidence from Turkey’s Top 1000 By Nuri Yildirim
  6. Labor Mobility Across The Formal/Informal Divide in Turkey: Evidence From Individual Level Data By Aysit Tansel; Elif Oznur Kan
  7. Bringing It All Back Home Return migration and fertility choices By Simone BERTOLI; Francesca Marchetta
  8. Islamic private equity: what is new? By YOUSFI, Ouidad
  9. Does the Iranian oil supply matter for the oil prices? By Farzanegan, Mohammad Reza

  1. By: Gokhan Yilmaz (Central Bank of Turkey)
    Abstract: Three decades of Turkish experience with nonselective industrial policies (consistent with neoliberal policy) clearly demonstrates that structural transformation in Turkish economy could not be achieved. In this paper, we have three motivations. Our first motivation is to discuss overall industrial policy developments in Turkey since 1980s. Secondly, we aim to recommend feasible selective industrial policies for Turkey to support structural transformation. Thirdly, we comment on new Industrial Policy Strategy in Turkey. In that respect, our three basic research questions are, firstly, “is there still any meaningful space to implement industrial policy in developing countries such as Turkey?”, secondly, “which policies could be used?” and thirdly, “what are the main shortcomings of new Industrial Policy Strategy in Turkey?”. Our research demonstrates that there is still meaningful space to implement selective industrial policy in developing countries such as Turkey. Moreover, new Turkish Industrialization Strategy needs significant revisions if it genuinely aims at structural transformation in Turkey.
    Keywords: Turkey, Industrial Policy, Structural Transformation, Economic Growth.; Turkey, Industrial Policy, Structural Transformation, Economic Growth
    JEL: O10 O14 O25
    Date: 2011
  2. By: Cem Iskender Aydin; Gokhan Ozertan; Begum Ozkaynak
    Date: 2011–07
  3. By: Aysit Tansel (Middle East Technical University); Yousef Daoud (Birzeit University)
    Abstract: This study exposes a comparative treatment of the private returns to education in Palestine and Turkey over the period 2004-2008. Comparable data, similar definitions and same methodology are used in the estimations. The estimates are provided first for average returns to education second for returns at different levels of schooling and finally for returns by different sectors of employment. The results suggest that returns to schooling are higher for Turkey at the various levels of education for Females and males and for both years 2004 and 2008. It is believed that the relative size of the Palestinian economy the uniqueness of subjugation to military occupation contribute greatly to this result. In 2008, returns are lower than 2004 levels for all levels of education; the pattern is less obvious for Turkey across the various levels. However, the 2008 crisis seems to have influenced the more educated more severely (MA and above) in both countries. Female returns to education are higher for women than men in both countries; the gender gap has worsened in 2008, but more so for Palestine. The median ratio of male to female return is 0.55 (university) in 2004 and decreased to 0.17 (high school) in 2008 in Palestine. The corresponding figures for Turkey are 0.79 and .082 (both for high school).Finally, it was found that the selectivity corrected return estimates are lower than the OLS estimates in Palestine while they are higher than the OLS estimates in Turkey.
    Keywords: Returns to Education, Mincer Equation, Gender, Palestine, Turkey
    JEL: J16 J24 J31 J45 O31
    Date: 2011
  4. By: Fatma Dogruel (Marmara University); Suut Dogruel (Marmara University)
    Abstract: The state owned enterprises were crucial in the early stage of industrial development in Turkey. They were producer of basic consumption goods and contributed the building the entrepreneurial understanding, and hence the development of the private sector. State owned enterprises have played key role in almost all sectors of the Turkish economy, including manufacturing sectors and various infrastructural facilities. After 1980, the radical transformation has occurred in Turkish economic policies: The reform process included not only financial liberalization and trade reforms, but also the privatization of the state owned enterprises. Initially, starting from the second half of 1980s, international organizations have advocated privatization as a “must” policy tool. The paper explores the effects of privatization on regional growth of Turkish manufacturing. The analyses are carried out at regional basis in order to detect to what extent the public sector is complement to or substitute of the private sector. The findings show that privatization has no perverse effects on the development of the manufacturing activities in the traditional and new industrial zones. However, its effects are in opposite directions in the poor regions.
    Keywords: Industrial policy, privatization, State Owned Enterprises, spatial distribution of manufacturing, shift-share analysis.
    JEL: O1 O25 O43 G38 R12
    Date: 2011
  5. By: Nuri Yildirim (Yasar University)
    Abstract: The view that profitability, not growth, is the driving force behind the firm performance, and unprofitable high growth can not lead to financial success has often been discussed in the literature. In this study, I tested this hypothesis on Turkey’s top 1000 data using an extended version of the method of Davidson et al. (2009). My sample strongly supports the hypothesis that controlling for leverage, low growth-high profitability (profit) firms outperform high growth-low profitability (growth) firms regarding both directions of their transition to an upper state and a lower state in subsequent periods. The hypothesis that controlling for type of firm (growth or profit firm), leverage matters with respect to firm’s future performance is weakly supported by 3-year transition data.
    Keywords: Firm performance, growth, profitability, Turkey
    Date: 2011
  6. By: Aysit Tansel (Middle East Technical University); Elif Oznur Kan (Cankaya University)
    Abstract: Informality has long been a salient phenomenon in developing country labor markets, thus has been addressed in several theoretical and empirical research. Turkey, given its economic and demographic dynamics, provides rich evidence for a growing, heterogeneous and multifaceted informal labor market. However, the existing evidence on labor informality in Turkey is mixed and scant. Along these lines, we aim to extend the existing literature by providing a diagnosis of dynamic worker flows across distinct labor market states and identifying the effects of certain individual and job characteristics on variant mobility patterns. More specifically, we first develop and discuss a set of probability statistics based on annual worker transitions across distinct employment states utilizing Markov transition processes. As Bosch and Maloney (2007:3) argue: “labor status mobility can be assumed as a process in which changes in the states occur randomly through time, and probabilities of moves between particular states are governed by Markov transition matrices”. Towards this end, we will use the novel Income and Living Conditions Survey (SILC) panel data set to compute the transition probabilities of individuals moving across the labor market states of formal-salaried, informal-salaried, formal self-employed, informal self-employed, unemployed and inactive. The transitions analysis is conducted separately for two, three and four year panels pertaining to 2006 to 2007, 2006 to 2008 and 2006 to 2009 transitions; for total, male and female samples; and lastly for total and non-agricultural samples. In this way, we aim to contribute to the limited body of stylized facts available on mobility and informality in the Turkish labor market. Next, we conduct multinomial logit regressions individually for each set of panel to identify the impact of individual characteristics (i.e. gender, age, education level, work experience, sector of economic activity, firm size, number of other household members, having/not having children, rural/urban) underlying worker transitions. The results reveal several relationships between the covariates and likelihood of variant transitions, and are of remarkable importance for designing policy to adress labor informality and reduce its negative externalities.
    Keywords: Labor market dynamics, informality, Markov processes, multinomial logit, Turkey
    JEL: J21 J24 J40 J63 O17
    Date: 2012
  7. By: Simone BERTOLI (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Francesca Marchetta (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Return migration exerts wide-ranging influence upon the countries of origin of the migrants. We analyze whether returnees adjust their fertility choices to match the norms which prevail in their previous countries of destinations, using Egyptian household-level data. Egyptians migrate predominantly towards other Arab countries characterized by higher fertility rates. Relying on a two-step instrumental variable approach to control for the endogeneity of the migration decisions, we show that return migration has a significant and positive influence on the total number of children. These results suggest that migration might not be an unmitigated blessing for Egypt, as it has contributed to slow down the process of demographic transition.
    Keywords: temporary migration; fertility; household-level data; North Africa; Egypt
    Date: 2012–01–12
  8. By: YOUSFI, Ouidad
    Abstract: The current paper analyzes similarities and differences between conventional and Islamic private equity (PE). Despite the financial subprime crisis and the lack of liquidities in financial markets, PE still play an important role in financing growing unlisted firms all over the world. However, conventional PE and Islamic PE display different features. First, Islamic PE funds have less investments opportunities and cannot diversify their projects across activities and sectors mainly because of the Shari’ah compliance criterion. For instance, the PE funds is composed of the managers team, the Shari’ah supervision board SSB and the supervision compliance officer SCO. Second, the choice of PE partnerships depends on the target’s performance, the Islamic scholars’ school and the religiosity degree of the country where they operate, and the SSB policy. Third, they bear varied and different risks from their conventional counterparts. As a consequence, Islamic PE financing is expensive and still not very competitive. Fourth, to overcome and mitigate risks, conventional PE funds can issue convertible securities and abandon prematurely bad quality projects. In contrast, Islamic PE funds are actively involved in the project only in specific cases and cannot exit prematurely the target but can sell gradually their stocks to cover their equity. Finally, financial modes vary according to the degree of involvement of the PE fund in the project and the pre-agreed arrangements between the entrepreneur and the PE fund.
    Keywords: Islamic Private Equity; venture capital; PLS
    JEL: G15 G34 G24
    Date: 2011–12–28
  9. By: Farzanegan, Mohammad Reza
    Abstract: There is an increasing tension between the Iranian Government and the west on an increasingly likely European oil embargo and the Iranian threat to close the Strait of Hormuz. The main question is: What will happen to the international oil prices in the case of shocks in the flow of Iranian oil to the international markets? In this study, we analyze the dynamic relationship between the Iranian oil supply and international oil prices from January 1973 - September 2011, using a modified version of the Granger causality test introduced by Toda and Yamamoto (1995). Our results show that there is no Granger causality between the Iranian oil production and international oil prices. Historical data on the Iranian oil production do not provide any useful information to explain the current and future values of international oil prices. Thus, global oil prices do not follow shocks in the Iranian oil production.
    Keywords: Oil price; Oil production; VAR model; Granger causality; Sanction; Iran
    JEL: Q32 Q34 E37
    Date: 2012–01–18

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