nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒03‒30
twelve papers chosen by
Paul Makdissi
University of Ottawa

  1. The Arab spring and the Euro- Mediterranean economic and political project By Jean-Yves Moisseron; Sébastien Abis; Julien Velud; Frédéric Teulon
  2. The Effect of the European Union Customs Union on the Balance of Trade in Turkey By Ketenci, Natalya
  3. Impact of Internal Migration on Political Participation in Turkey By Akarca, Ali T.; Tansel, Aysit
  4. High versus Low Inflation: Implications for Price-Level Convergence By M. Ege Yazgan; Hakan Yilmazkuday
  5. Firm Exit and Exchange Rates: An Examination with Turkish Firm-Level Data By Nazli Karamollaoglu; M. Ege Yazgan
  6. The effect of global financial crisis on trade elasticities: Evidence from BRIICS countries and Turkey. By Ketenci, Natalya
  7. Heterogeneous Institutional environments and Franchise networks Development in Maghreb By Odile CHANUT; Nadjoua GHARBI; Dominique BONET FERNANDEZ
  8. Are Moral Islamic Economics an Answer to the Global Financial Crisis ? By Jean-Yves Moisseron; Frederic Teulon
  9. All in the family : state capture in Tunisia By Rijkers, Bob; Freund, Caroline; Nucifora, Antonio
  10. Studying the Validity of the Efficient Market Hypothesis (EMH) in the Egyptian Exchange (EGX) after the 25th of January Revolution By Kamal, Mona
  11. Une évaluation de la taille de l'économie informelle par un système complet de demande estimé sur données monétaires et temporelles. By Armagan Tuna Aktuna-Gunes; Christophe Starzec; François Gardes
  12. Nufus Yapisindaki Degisimlerin Uzun Donem Konut Talebi Uzerindeki Etkileri By Yavuz Arslan; Evren Ceritoglu; Birol Kanik

  1. By: Jean-Yves Moisseron; Sébastien Abis; Julien Velud; Frédéric Teulon
    Abstract: The popular revolts in the North Africa countries were at the origin of an unprecedented period of political and socio-economic transformations. The «Arab Spring» with all of its diversity of rationales and local expressions is leading to important changes in the dynamics of the European-Mediterranean partnership, going so far in some countries as to raise fundamental questions and diverging pathways to Euro-Mediterranean integration. If we compare Morocco and Tunisia from this perspective, the former continues on a course toward enhanced institutional integration while the latter marks a pause in its integration efforts. In a transition country like Tunisia, but also in a more stable country as Morocco, it is obvious that the relations with the EU will have to evolve.
    Date: 2014–02–25
  2. By: Ketenci, Natalya
    Abstract: This paper investigates the effect of the customs union between Turkey and the European Union on the balance of trade in Turkey. The framework for analysis is an extended trade gravity model onto which the impact of the customs union is applied. The gravity model of trade is estimated using dynamic panel data which applies the Generalized Method of Moments to a sample of OECD countries. Separate estimates were made for the periods before and after the process of trade liberalization in Turkey – 1980-1995 and 1996-2012, respectively – as well as for the full period – 1980-2012. The main conclusion is that when the European Union is accounted for as an econometric variable, the empirical results are striking: Turkey’s gains resulting from taking part in the customs union are noteworthy, with significant improvement in the trade balance with European Union countries. However, the trade flows, and specifically imports, have been mainly with OECD countries that are themselves not members of the EU. The model indicates that external common tariffs are responsible for Turkey’s trade growth rather than tariffs abolished in the internal market of the customs union.
    Keywords: Gravity model; GMM; Customs Union; European Union; OECD countries, Turkey.
    JEL: F13 F14 F15
    Date: 2014
  3. By: Akarca, Ali T. (University of Illinois at Chicago); Tansel, Aysit (Middle East Technical University)
    Abstract: During last sixty years, Turkish population moved from one province to another at the rate of about 7-8 percent per five-year interval. As a consequence of this massive internal migration, population residing in a province other than the one they were born in increased from 12 percent in 1950 to 39 percent in 2011. Impact of this population instability on provincial turnout rates in 2011 parliamentary election is studied, controlling for the effects of other socio-economic, demographic, political and institutional factors. Consequences of migration both at destinations and origins are considered. According to robust regressions estimated, the relationship between turnout and education is inverse U-shaped, and between turnout and age, U-shaped. The latter reflects generational differences as well. Large population, large number parliament members to be elected from a constituency, participation by large number of parties, and existence of a dominant party depress the turnout rate. A percentage increase in the proportion of emigrants among the people born in a province reduces turnout rate in that province by 0.13 percentage points, while a percentage increase in the ratio of immigrants in the population of a province reduces it by 0.06 percentage points. However, at destinations where large numbers of immigrants from different regions are concentrated, the opportunity afforded to immigrants to elect one of their own, reduces the latter adverse impact significantly and in some cases turns it to positive.
    Keywords: election turnout, internal migration, political participation, Turkey, voter behavior
    JEL: D72 J61
    Date: 2014–03
  4. By: M. Ege Yazgan (Istanbul Bilgi University); Hakan Yilmazkuday (Department of Economics, Florida International University)
    Abstract: This paper investigates the relationship between the level of inflation and regional price-level convergence utilizing micro-level price data from Turkey during two clearly distinguishable periods of high and low inflation. The results indicate that higher persistence and slower convergence of price levels are evident during the low-inflation period, which corresponds to the inflation targeting (IT) regime. During the low-inflation IT regime, inflation convergence across regions appears to occur more quickly and may be responsible for the slower pace of convergence in price levels. Overall, IT in Turkey, which was successful in lowering and maintaining inflation at acceptable levels, also appears to be associated with faster convergence in inflation rates at the expense of slower convergence in price levels.
    Keywords: Price Convergence, Inflation Convergence, Micro-level Prices, Turkey.
    JEL: E31 F41
    Date: 2014–03
  5. By: Nazli Karamollaoglu (MEF University, Turkey); M. Ege Yazgan (Istanbul Bilgi University)
    Abstract: Micro-level empirical research has begun to obtain important results on the effects of currency variations on firms' survival. To date, the literature has lacked detailed analysis of the effects of exchange rates on firms' survival behavior in emerging markets due to a scarcity of firm level information. Using a unique firm-level dataset, we test the impact of currency appreciation on the survival behavior of Turkish firms in manufacturing industries for 2002-2009. The results suggest that real exchange rate appreciation decreases the probability of survival in manufacturing industries. We also find that high (low) productivity firms have higher (lower) probability of survival than low (high) productivity firms as a result of domestic exchange rate appreciation. This evidence indicates that economic events/policies leading to appreciation in domestic currency should be cautiously managed, especially in a resource constrained emerging market economy such as Turkey.
    Keywords: Exchange rate, firm-level, export, emerging markets, survival.
    JEL: F14 F31 F41
    Date: 2014–03
  6. By: Ketenci, Natalya
    Abstract: The effect of the global financial crisis on the international trade patterns of developed countries has been one of the main focuses of recent studies. However, the dependence level of world trade on emerging markets increases every day. Therefore, it is important to study the level of the negative effect of the crisis on emerging economies and the level of their recovery potential. This paper empirically studies the effects of the financial crisis on changes in the trade elasticities of BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) countries and Turkey. The imperfect substitute model (Goldstein and Khan 1985) for the export and import demand functions is used. The autoregressive distributed lag (ARDL) approach to cointegration is applied to test the cointegration relationships between exports and imports and their determinants and in order to estimate the export and import elasticities in the countries under examination. The empirical results provide enough evidence to conclude that changes in the exchange rate did not play significant role in export and import demand functions before the global financial crisis and after. However, foreign and domestic incomes are found highly significant and elastic in export and import demand functions, respectively. It is found as well that the global financial crisis had increasing effect on export and import responsiveness to foreign and domestic incomes respectively, except for Turkey and Brazil in the export demand function and South Africa in the import demand function.
    Keywords: financial markets; international trade; emerging markets.
    JEL: F14 F41
    Date: 2013
  7. By: Odile CHANUT; Nadjoua GHARBI; Dominique BONET FERNANDEZ
    Abstract: Franchising has become a dominant model of distribution in the Western world. Franchising is also developing in emerging markets, with the internationalization of Western franchise systems. This paper analyses the franchise expansion differences between Morocco, Algeria and Tunisia. Explanations are proposed, based on insights from institutional theory (DiMaggio and Powell, 1983), where franchising literature has focused on agency theory and efficiency considerations in order to explain franchising expansion. The institutional environment, such as country risk, acceptance of foreign investment, and legal constraints may explain the differences in franchising expansion between the three countries as well as the government’s willingness to modernize the distribution structures. Another consideration is the franchise specific environment pertaining to franchising law: the right of the franchise, the development of federations that act to legitimize the franchise partners with resource providers, banks, and candidates for the franchise. An analytical framework of the institutional environment specific to the franchise is proposed.
    Keywords: Franchising business format, institutional environment, institutional theory, franchising law, Maghreb, Morocco, Algeria, Tunisia.
    Date: 2014–02–25
  8. By: Jean-Yves Moisseron; Frederic Teulon
    Abstract: One may think that Islam has not much to say on the Crisis of Capitalism because the corpus underpinning the Islamic thought: The Coran and the Sunnah were established long before the development of capitalism. Islamic economy would be then adapted to Pre-capitalist societies. Zakat may be useful to undeveloped society and prohibition of Riba may be convenient only with traditional economy based mainly on trade. One can stand that Islamic thought is not convenient for developed capitalism and for modern societies. The history of Islamic economics proves the contrary.
    Date: 2014–02–25
  9. By: Rijkers, Bob; Freund, Caroline; Nucifora, Antonio
    Abstract: This paper examines the relationship between regulation and the business interests of President Ben Ali and his family, using firm-level data from Tunisia for 1994-2010. Data on investment regulations are merged with balance sheet and firm-level census data in which 220 firms owned by the Ben Ali family are identified. These connected firms outperform their competitors in terms of employment, output, market share, profits, and growth and sectors in which they are active are disproportionately subject to authorization requirements and restriction on foreign direct investment. Consistent with theories of capture, performance differences between connected firms and their peers are significantly larger in highly regulated sectors. In addition, the introduction of new foreign direct investment restrictions and authorization requirements in narrowly defined five-digit sectors is correlated with the presence of connected firms and with their startup, suggesting that regulation is endogenous to state capture. The evidence implies that Tunisia's industrial policy was used as a vehicle for rent creation for the president and his family.
    Keywords: Microfinance,Debt Markets,Investment and Investment Climate,Emerging Markets,Transport Economics Policy&Planning
    Date: 2014–03–01
  10. By: Kamal, Mona
    Abstract: There is no doubt that the close of the Egyptian Exchange (EGX) during the period 28/1- 22/3/2011 in the wake of 25th of January Revolution has a consequence on the efficiency of the stock market. This paper assesses the 'close-open-effect' on the main price indices. The results indicate the absence of unit roots in the main price indices before and after the revolution. This implies the rejection of weak-form efficiency. The estimation of the (EGARCH model) reflects information asymmetry after the revolution with bad news affecting the investors’ expectations more rapidly. In addition, a negative and significant 'close-open-effect' on the returns of the main price index is evident in the results.
    Keywords: The Egyptian Exchange (EGX), the Efficient Market Hypothesis (EMH).
    JEL: G1 G14
    Date: 2014–03–23
  11. By: Armagan Tuna Aktuna-Gunes (Centre d'Economie de la Sorbonne - Paris School of Economics); Christophe Starzec (Centre d'Economie de la Sorbonne - Paris School of Economics); François Gardes (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: We use the demand system approach to estimate the size of informal economy in Turkey following the methodology based on the analysis of the individual consumption behaviour proposed by Pissarides, Weber [1989], Lyssiotou et al. [2004] and Fortin et al. [2009]. We extend this method by taking into account both the monetary expenditures and time spent on domestic activities. The necessary information of money and time inputs in consumption on the household's level is obtained by a statistical match of the Turkish Family Budget and Time Use surveys [2006]. As expected, the estimated model size of the informal economy in Turkey using the full (time plus money) expenditure is higher than those obtained by only monetary expenditure approach (in average 40.6% and 33.5% of GDP for self employers and 20.7% and 14.1% of GDP for wage-earners respectively) and also higher than that obtained by more conventional macroeconomic methods (35.1%).
    Keywords: Informal economy, complete demand system, full expenditures.
    JEL: D01 D12 E26 C81
    Date: 2014–03
  12. By: Yavuz Arslan; Evren Ceritoglu; Birol Kanik
    Abstract: Bu calismada Turkiye icin nufus dagilimi dinamiklerinin uzun donemde konut talebi uzerindeki etkisi incelenmektedir. TUIK hanehalki butce anketi verileri kullanilarak hanehalki konut talebi hanehalkindaki bireylerin yas araliklari ile iliskilendirilmis ve her bir yas araligi icin konut talebi elde edilmistir. Bu tahmin sonuclari TUIK nufus projeksiyonlari ile birlestirilerek Turkiye icin uzun donem konut talebi projeksiyonu bulunmustur. Ekonometrik tahminler konut talebindeki buyumenin nufus artisinin yani sira Turk toplumunun nufus yapisindaki degisimlerinden etkilendigini gostermektedir. 2009-2050 yillari arasinda kalan donemde konut talebi yillik ortalama yuzde 1,48 oraninda artarken; soz konusu artisin yuzde 1,08’lik kisminin nufus artisindan ve kalan yuzde 0,4’luk artisin nufus yapisindaki degisimden kaynaklanacagi tahmin edilmektedir.
    Keywords: Konut piyasasi, Konut talebi, Demografi
    JEL: J11 R21 R30
    Date: 2014

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