nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒02‒05
eleven papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The Impact of Syrian Refugees on Natives' Labor Market Outcomes in Turkey: Evidence from a Quasi-Experimental Design By Ceritoglu, Evren; Gurcihan Yunculer, H. Burcu; Torun, Huzeyfe; Tumen, Semih
  2. The State of Property Development in Turkey: Facts and Comparisons By Seda Demiralp; Selva Demiralp; Inci Gumus
  3. Unemployment and Labor Force Participation in Turkey By Tansel, Aysit; Ozdemir, Zeynel / A.; Aksoy, Emre
  4. The Size of Informal Economy and Demand Elasticity Estimates Using Full Price Approach: A Case Study for Turkey. By Armagan Tuna Aktuna-Gunes; François Gardes; Christophe Starzec
  5. Institutions and Development in MENA Region: Evidence from the Manufacturing Sector By Arayssi, Mahmoud; Fakih, Ali
  6. Egyptian media under transition: in the name of the regime... in the name of the people? By Fatima El Issawi
  7. Determinants of Transitions across Formal / Informal Sectors in Egypt By Tansel, Aysit; Ozdemir, Zeynel Abidin
  8. Return dynamics and volatility spillovers between FOREX and MENA stock markets: what to remember for portfolio choice? By Arfaoui, Mongi; Ben Rejeb, Aymen
  9. The reconstruction of post-war Kuwait: a missed opportunity? By Sultan Barakat; John Skelton
  10. ‘Greater Chinese’ global production networks in the Middle East: the rise of the Jordanian garment industry By Shamel Azmeh; Khalid Nadvi
  11. Glass ceiling and belief flipping : theory and evidence from egypt By Lamia Kandil

  1. By: Ceritoglu, Evren; Gurcihan Yunculer, H. Burcu; Torun, Huzeyfe; Tumen, Semih
    Abstract: Civil war in Syria, which started in March 2011, has led to a massive wave of forced immigration from the Northern Syria to the Southeastern regions of Turkey. This paper exploits this natural experiment to estimate the impact of Syrian refugees on the labor market outcomes of natives in Turkey. Using a difference-in-differences strategy, we find that immigration has considerably affected the employment outcomes of natives, while its impact on wage outcomes has been negligible. We document notable employment losses among informal workers as a consequence of refugee inflows. The majority of those who lost their informal jobs have either left the labor force or remained unemployed. Overall, unemployment rates have increased, while labor force participation, informal employment, and job finding rates have declined among natives. Disadvantaged groups -- i.e., females, younger workers, and less-educated workers|have been affected the worst. The prevalence of informal employment in the Turkish labor markets has amplified the negative impact of Syrian refugee inflows on natives' labor market outcomes.
    Keywords: Syrian civil war; immigration; Turkey; labor market; informality; difference in differences.
    JEL: C21 J15 J21 J61
    Date: 2015–01–21
  2. By: Seda Demiralp (Department of Political Science, Isik University); Selva Demiralp (Department of Economics, Koc University); Inci Gumus (Faculty of Arts and Social Sciences, Sabanci University)
    Abstract: Turkey has been going through a profound urban renewal process in the past decade, mainly based on a policy where public land is rapidly commodified by the state and used for construction projects through public-private partnerships. To some, this mechanism of state-led property development defines a new era in Turkish political economy and that the government shifted away from its earlier economic orientation defined by a commitment to structural reforms and production of exportable goods. Yet others deny the existence of such a shift and highlight that the growth rate in Turkey’s construction sector is not above global trends. Despite profound public interest in the topic, empirical studies that investigate the subject remain limited. This paper aims to make a contribution in this regard and investigates how the sectoral decomposition of GDP has changed in recent years, with an emphasis on the construction and industrial sectors.
    Date: 2015–01
  3. By: Tansel, Aysit; Ozdemir, Zeynel / A.; Aksoy, Emre
    Abstract: This paper investigates the relationship between labor force participation rate and unemployment rate in Turkey a developing country. Cointegration analysis is carried out for the aggregate and gender and age specific series. The findings indicate that there is no long-run relationship between labor force participation and unemployment rates in Turkey. Thus, unlike in the case of the developed countries the unemployment invariance hypothesis is supported in Turkey.
    Keywords: Unemployment Invariance Hypothesis, Cointegration, Turkey
    JEL: E24
    Date: 2015–01–25
  4. By: Armagan Tuna Aktuna-Gunes (Centre d'Economie de la Sorbonne - Paris School of Economics); François Gardes (Centre d'Economie de la Sorbonne - Paris School of Economics); Christophe Starzec (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: In this article, the size of informal economy is measured by using the full price method proposed by Gardes F. (2014). As an extension of this method, price elasticities are re-estimated by integrating the underreported earning shares both for wage workers and self-employers from cross-sectional data covering 2003-2006 in Turkey. The contribution of this paper is threefold: The size of informal economy is estimated by a statistical matching of the Turkish Family Budget and Time Use surveys through a complete demand system including full prices. Second, more accurate price and income elasticities are estimated by using the monetary incomes from informal activities for an emerging economy such as Turkey. Third, extended full price estimation of demand elasticities allow us to discover for which consumption group households are more likely to engage in informal work.
    Keywords: Informal economy, complete demand system, full prices, demand elasticity.
    JEL: E26 D1 D12 J22
    Date: 2014–12
  5. By: Arayssi, Mahmoud (Lebanese American University); Fakih, Ali (Lebanese American University)
    Abstract: This paper examines the role of institutions (including civil law origin), financial deepening and degree of regime authority on growth rates in the Middle East and North Africa (MENA) region using panel data through a fixed effect model. The results reveal that English civil law origin and the establishment of the rule of law work with the development of financial institutions to increase economic growth in these economies; however, the democratization of the political institutions and foreign direct investment do not assist financial development in promoting economic growth. The findings emphasize the prominence of overcoming institutional weaknesses and establishing transparent public policy governing businesses as a pre-requisite for successful universal integration in developing countries.
    Keywords: economic growth, institutional development, financial development, MENA region
    JEL: G2 O16 P48
    Date: 2015–01
  6. By: Fatima El Issawi
    Abstract: Polis fellow Fatima El-Issawi looks at post-uprising Egyptian Media in a new report following her previous research on media in Libya and Tunisia.
    JEL: L91 L96
    Date: 2014
  7. By: Tansel, Aysit (Middle East Technical University); Ozdemir, Zeynel Abidin (Gazi University)
    Abstract: Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows across different labor market states. We develop transition probabilities by gender across different labor market states utilizing Markov transition processes. Next we identify the effects of individual, household, job characteristics and location on different mobility patterns by estimating a multinomial logit regression. The results point to the highly static nature of the Egyptian labor market. Government employment and the out of labor force are the most persistent labor market states. Further, only a few of the explanatory variables except high levels of education are found to have predictive power in explaining the transitions from formal wage, informal wage, self-employment, unemployment government employment and out of labor market states.
    Keywords: labor market dynamics, informality, Markov processes, multinomial logit, Egypt
    JEL: J21 J24 J40 J63 O17
    Date: 2015–01
  8. By: Arfaoui, Mongi; Ben Rejeb, Aymen
    Abstract: This article investigates stock-forex markets interdependence in MENA countries for the period spanning from February 26, 1999 to June 30, 2014. The analysis has been performed through three competing models; the VAR-CCC-GARCH model, the VAR-BEKK-GARCH model and the VAR-DCC-GARCH model. Our findings confirm that both markets are interdependent and corroborate with stock and flow oriented approaches. We find also that, comparing to optimal weights, hedge ratios are typically low, which denote that hedging effectiveness is quite good. Estimation of hedging effectiveness allow concluding that the incorporation of foreign exchange in a full stock portfolio increase the risk-adjusted return while reducing its variance. We note here that the forex market is overweighed for both portfolio designs and hedging strategies. More importantly, this evidence holds for all countries as well as for all considered models. These findings open up new insights for managerial and governmental policy purpose.
    Keywords: MENA markets, Foreign exchange, flow oriented model, portfolio balance approach, volatility spillovers, portfolio designs, hedging effectiveness
    JEL: C1 G1 G11
    Date: 2015–01–04
  9. By: Sultan Barakat; John Skelton
    Abstract: The reconstruction of Kuwait, following its occupation by Saddam Hussein’s Iraq in 1990, constitutes a significant though rarely studied episode of post-war recovery. On the eve of liberation in 1991, Kuwait faced a number of challenges including physical rehabilitation and reconstruction, political and constitutional issues, reconciling a deeply divided population and socio-economic recovery. The passing of more than twenty years since Kuwait’s liberation allows the paper to reflect, from a long-term perspective, on the decisions which were taken following liberation and how these have impacted the country’s subsequent political, social and economic trajectory. The timeliness of such an examination has been highlighted by the contemporary ongoing political crisis in Kuwait in the context of the Arab Spring, at the centre of which stands a widely perceived, long-standing deficit of the Al Sabah regime’s political legitimacy. The paper argues that had Kuwait’s reconstruction assumed a different shape, it is conceivable that the country would have experienced a profoundly different development trajectory over the following two decades. The authors contend that Kuwait’s contemporary political and socio-economic crises have their roots in a post-war reconstruction model which delivered substantial success in physical and rapid macro-economic recovery, but which did not fully realise opportunities to establish an accountable and trusted governance system, promote reconciliation and equality between divided groups, and encourage sustainable social and economic development. The paper argues that the opportunity to deliver long-term benefits was undermined by a non-holistic post-war vision dominated by notions of regime security which in turn necessitated renewed post-war business-as-usual authoritarianism, exclusionary nationalist policies and the recreation of the pre-war power-for-welfare political trade-off.
    JEL: N0
    Date: 2014
  10. By: Shamel Azmeh; Khalid Nadvi
    Abstract: The expansion of ‘Greater Chinese’ capital from mainland China, Hong Kong and Taiwan into other parts of the developing world is increasingly noted. It is especially prominent in sub-Saharan Africa where Greater Chinese investments, firms and workers are found across a wide range of activities, from the extractive commodity sectors, to infrastructure projects, agriculture and manufacturing. One region where Greater Chinese investment is less well studied is the Middle East. This article focuses on the case of Jordan. Jordan has rapidly emerged as an important supplier of apparel to the United States, a consequence of a distinct preferential trade agreement. The article charts the ways in which this preferential trade agreement has stimulated the shifts of Greater Chinese garment manufacturers to Jordan. Using a global production networks (GPN) framework, and drawing on primary and secondary evidence, it assesses the dynamics behind Greater Chinese investments into Jordan; it also explores the ways in which Greater Chinese garment producers operating in Jordan organize their supply chains and are linked into the global garments GPNs. Finally, it considers the relationship between such capital flows and the influx of Asian migrant workers into the Jordanian export garment sector.
    JEL: J50
    Date: 2013–11
  11. By: Lamia Kandil (OFCE (OFCE))
    Abstract: This paper proposes a dynamic statistical-discrimination model of job assignment and promotion which takes into account the endogeneity of human-capital investment and where the employer’s prior beliefs are self-fulfilling in equilibrium. The model shows that the equilibrium results from standard statistical-discrimination models may change when we account for discrimination/self-selection in hiring via the employer’s beliefs about worker expected quit rates and ability. The model is estimated on the Egyptian labour market using a multivariate simulated maximum likelihood model, and the results confirm the model’s predictions. When women face significant adversity in hiring, those women who overcome this initial discrimination are as likely to be promoted as their male counterparts with
    Keywords: efficient promotion; gender discrimination; prejudice
    JEL: J16 J71
    Date: 2015–01

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