nep-ara New Economics Papers
on Arab World
Issue of 2013‒07‒28
ten papers chosen by
Paul Makdissi
University of Ottawa

  1. The Dynamics of Road Energy Demand and Illegal Fuel Activity in Turkey: A Rolling Window Analysis By A. Talha Yalta
  2. Dynamic Analysis of Money Demand Function: Case of Turkey* By doğru, bülent
  3. The Political Economy of Oil and the Crisis of the Arab State System By Daniel Atzori
  4. Determinants of Capital Structure: Evidence from a Major Emerging Market Economy By Bülent, Köksal; Cüneyt, Orman; Arif, Oduncu
  5. "Quality of Statistical Match and Simulations Used in the Estimation of the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) for Turkey in 2006" By Thomas Masterson
  6. Education Attainment, Further Female Participation & Feminization of Labor Markets in Arab Countries By Filali Adib, Fatima-Zohra ,; Driouchi, Ahmed; Achehboune , Amale
  7. Diaspora versus Refugee: The Political Economy of Lebanese Entrepreneurship Regimes By Nora Stel
  8. The Nexus between Electricity Consumption and Economic Growth in Bahrain By Hamdi, Helmi; Sbia, Rashid; Shahbaz, Muhammad
  9. Power Sharing in Syria: Lessons from Lebanon’s Experience By Stephan Rosiny
  10. Long-Term Monarchical Survival in the Middle East: A Configurational Comparison, 1945–2012 By André Bank; Thomas Richter; Anna Sunik

  1. By: A. Talha Yalta
    Date: 2013–01
  2. By: doğru, bülent
    Abstract: In this paper, the dynamic determinants of money demand function and the long-run and short-run relationships between money demand, income and nominal interest rates are examined in Turkey for the time period 1980-2012. In particular we estimate a dynamic specification of a log money demand function based on Keynesian liquidity preference theory to ascertain the relevant elasticity of money demand. The empirical results of the study show that in Turkey inflation, exchange rate and money demand are co-integrated, i.e., they converge to a long run equilibrium point, and money demand function in Turkey.
    Keywords: Dynamic Ordinary Least Squares, Vector Error Correction, Money Demand Function
    JEL: C51 E52
    Date: 2013–01–15
  3. By: Daniel Atzori (FEEM and Agenzia Giornalistica Italia (AGI))
    Abstract: This paper argues that the so-called Arab spring is part of a tectonic shift which signals the frailty of the Arab state system as such. Countries benefitting from oil and gas rents have been more resilient, because of their potential to create systems of incentives and disincentives in order to prevent disruptive social change. Islamism, whose emergence is connected with rentier state dynamics is, at the same time, an opportunity and a threat for the survival of the Arab state and, in general, of the Arab states system. In this context, national oil companies can increasingly be conceptualized not merely as instruments of the state, but as bulwarks of nation-state legitimacy in a period of chaos.
    Keywords: Oil, Energy, Political Economy, MENA, Globalization, Arab Spring
    JEL: N5 O1 P1 Q3 Q4
    Date: 2013–06
  4. By: Bülent, Köksal; Cüneyt, Orman; Arif, Oduncu
    Abstract: This paper uses a new and comprehensive dataset to investigate the capital structure of non-financial firms in a major emerging market economy, Turkey. We study both statistical and economic significance of four types of leverage factors: Firm-specific, tax-related, industry-specific, and macroeconomic. Results suggest that tax-related factors and asset tangibility are the most economically significant factors for short-term and long-term debt ratios, respectively. Results also suggest that inflation is an important determinant of leverage and the most economically significant macroeconomic factor. Moreover, we provide evidence that firms adjust their leverage towards the industry median, that firms match the maturity of their assets and liabilities, and that inflows of foreign capital have a marked influence on firms’ capital structures, particularly on large and mature non-manufacturing firms. We also conduct a systematic analysis of capital structure differences between manufacturing and non-manufacturing, small and large, and young and mature firms. Overall, the trade-off theory appears to be more successful than the pecking order theory in accounting for the capital structure of Turkish non-financial firms.
    Keywords: Capital structure, non-financial firms, pecking order theory, trade-off theory, Turkey
    JEL: G30 G32
    Date: 2013–07–17
  5. By: Thomas Masterson
    Abstract: The quality of match of the statistical match used in the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) estimates for Turkey in 2006 is described. The match combines the 2006 Zaman Kullanim Anketi (ZKA 2006) with the 2006 Hanehalki Bütçe Anketi (HBA 2006). These are the national time-use survey and household income and expenditure surveys, respectively. The alignment of the two datasets is examined, after which various aspects of the match quality are detailed. The match is of high quality, given the nature of the source datasets. The quality of the simulation of employment gains for Turkey in 2006 is then described. All eligible adults not working for pay, as employers, or as unpaid household workers were assigned jobs. In all households that included job recipients, the time spent on household production was imputed for everyone included in the time-use survey. Household consumption was then assigned to each household in the simulation containing a job recipient. The recipient group was compared to the donor group, both in terms of demographic similarity and in terms of the imputed usual hours, earnings, and household production generated in the simulation. In both cases, the simulations were of reasonable quality, given the nature of the challenges in assessing their quality.
    Keywords: Statistical Matching; Labor Force Simulation; Time Use; Household Production; Poverty; Levy Institute Measure of Time and Consumption Poverty; LIMTCP; Turkey
    JEL: C14 C40 D31 J22
    Date: 2013–07
  6. By: Filali Adib, Fatima-Zohra ,; Driouchi, Ahmed; Achehboune , Amale
    Abstract: The feminization of labor markets through the role of education is among the means that enhances the participation of women to development and ensures further involvement of human resources in the growth and development processes. While this is a process that is highly pursued in most developed economies, it is not clearly seen to be pervasive in most developing countries. The Arab economies are among those countries where lower participation of women is observed but where education is an important driver for further feminization of labor markets. These issues are discussed in the present chapter to underline the role of education in Arab economies in expanding further participation of human resources to local labor markets in these economies.
    Keywords: Labor markets, feminization, school attainment, skilled labor.
    JEL: O1 O15
    Date: 2013–07–21
  7. By: Nora Stel (Nora Stel is Research Fellow at Maastricht School of Management (MSM) and PhD Candidate at Utrecht University’s Centre for Conflict Studies. Contact: and/or; 0031628530429)
    Abstract: Lebanon is widely renowned for its entrepreneurial acumen. This reputation is largely built on the success story of the worldwide Lebanese diaspora. There is, however, another group of transnational entrepreneurs associated with Lebanon. This is the Palestinian refugee community living in Lebanon. Whereas Lebanese entrepreneurs abroad are commonly credited for making a crucial contribution to Lebanon’s economy, post-Civil War reconstruction and national identity through seeking innovation and utilizing opportunity, Palestinian entrepreneurs in Lebanon overwhelmingly fall within the category of selfemployed necessity entrepreneurs. This, while “it is widely believed that [both] the Lebanese and the Palestinians are among the top entrepreneurs in the world” (Kawasmi 2011). This paper engages with the duality of Lebanese migrant entrepreneurship and juxtaposes the veneration of the Lebanese entrepreneurship diaspora with the marginalization of Palestinian entrepreneurial capacity. I argue that the main rationale for the paradox of Lebanon’s simultaneous championing and undermining of entrepreneurial potential should be sought in its highly sectarian and elitist political order. Whereas the ascendancy of the Lebanese diaspora(s) was boosted in sectarian struggles for political and economic power, the economic relegation of the Palestinian refugees is part of a comprehensive regime of sectarian neutralization. Accordingly, the rationale for contrasting these two specific groups of migrant entrepreneurs – and not, for instance, Palestinian and other foreign entrepreneurs in Lebanon or Lebanese and Palestinian entrepreneurs in Lebanon – lies in their shared deep connection to the Lebanese sectarian-political system (a characteristic non-Palestinian foreign entrepreneurs in Lebanon lack) and their shared context of migrant entrepreneurship (an experience naturally not applicable to Lebanese entrepreneurs in Lebanon). It is this common engagement with the Lebanese political system from a migrant entrepreneurship perspective that connects these two groups residing at the extreme ends of the same political economy. Palestinian entrepreneurs in Lebanon and Lebanese entrepreneurs abroad are tied to the Lebanese system in a way that shows most pungently the effects a specific political economy might have on migrant entrepreneurship, the core objective of this paper. Through this main argument the paper makes two broader contributions to the literature on migration and entrepreneurship. First, it emphasizes the significance of the political in determining not so much the extent but the nature of entrepreneurship – ranging from necessity to opportunity and innovation. This observation is particularly pertinent in light of the ‘Arab Spring’ and complements economic perspectives on entrepreneurship. Second, and related to this, the paper shows the merits of analyzing differences in entrepreneurship regimes within countries in addition to the usual comparisons between countries. This paper should be conceived of predominantly as a sensitizing exercise, its main purpose being to offer an alternative perspective on the dichotomous discussion on the main determinants of entrepreneurship in diasporic or refugee communities as being either structural or personal. It does so through an in-depth discussion of the Lebanese case. As such, I do not seek to discuss primary empirical data, even if the observations made in this paper are grounded in extensive fieldwork in among both Palestinian and Lebanese communities in Lebanon on related topics, but rather to present an additional analytical framework for existing data sets. My main methodology is therefore that of a qualitative case-study based on literature review and document analysis and complemented by contextual fieldwork.
    JEL: F55 H1 H7 J7 L13 L26 Z13
    Date: 2013–07
  8. By: Hamdi, Helmi; Sbia, Rashid; Shahbaz, Muhammad
    Abstract: This paper explores the relationship between electricity consumption, foreign direct investment, capital and economic growth in case of the Kingdom of Bahrain. The Cobb-Douglas production is used over the period of 1980Q1–2010Q4. We have the ARDL bounds testing approach and found that cointegration exists among the series. Electricity consumption, foreign direct investment and capital add in economic growth. The VECM Granger causality analysis has reported the feedback effect between electricity consumption and economic growth and same is true for foreign direct investment and electricity consumption. This suggests us to explore sources of energy to achieve sustainable economic development for long run.
    Keywords: Electricity Consumption, Economic Growth, Foreign Direct Investment, Bahrain
    JEL: C5 C51
    Date: 2013–07–05
  9. By: Stephan Rosiny (GIGA German Institute of Global and Area Studies)
    Abstract: In the last two years, the Syrian uprising has turned from a civil protest movement against an authoritarian regime into an outright civil war in which the antagonists’ affiliations and identities are increasingly framed in sectarian speech. In summer 2012, various politicians and analysts suggested a power-sharing agreement between regime and opposition representatives as a solution to break the vicious circle of escalating violence. They called it a “Syrian Taif” after the 1989 peace accord that ended Lebanon’s long-lasting civil war (1975–1990) by dividing power among religious communities. Others rejected the idea of a consociational power-sharing deal outright because they hold it responsible for the continued sectarian pillarization of Lebanese society. Moreover, Syria’s experience is said to differ significantly from Lebanon’s, making the effective transmittal of the Lebanese model impossible. This paper takes these differing arguments into consideration and investigates whether power sharing could help to deescalate the Syrian conflict and what lessons should be taken from Lebanon’s experience. Lebanon shows that consociationalism tends to stabilize – even deepen – social cleavages. Therefore, a Syrian Taif should gradually substitute fixed guarantees of shares of power with centripetal and unitary state institutions. Furthermore, in addition to internal actors, external powers have to be convinced that power sharing may be the only viable option for ending the devastating civil war in Syria and for preventing the further spread of violence into neighboring countries.
    Keywords: power sharing, civil war, sectarianism, Syria, Lebanon, Taif
    Date: 2013–05
  10. By: André Bank (GIGA German Institute of Global and Area Studies); Thomas Richter (GIGA German Institute of Global and Area Studies); Anna Sunik (GIGA German Institute of Global and Area Studies)
    Abstract: The rationale is straightforward and persuasive: intrastate conflicts are by definition subnational phenomena. If we want to understand them fully, it may be wise to refocus our attention from the country level to the subnational level. Where violence is located might inform us as to why it erupts and how it is linked to various political, economic or social factors. The number of statistical geospatial analyses undertaken at the subnational level has been increasing constantly in recent years. Even though such studies have contributed greatly to peace and conflict research, they have come with their own challenges. Most importantly, they often do not adequately consider the theoretical and conceptual implications of switching from conventional cross-country to subnational analysis; this has led to dubious theoretical arguments and conclusions. Moreover, operationalization and measurement issues often limit these analyses’ explanatory power. The paper reviews several geospatial analyses of violent conflict, points out the limitations of the previous research and proposes some potential avenues for improvement.
    Keywords: civil war, political violence, geospatial analysis, subnational analysis, causality
    Date: 2013–02

This nep-ara issue is ©2013 by Paul Makdissi. 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.