nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒03‒22
ten papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Mutual Fund Performance in MENA Countries: Environmental Conditions and Fund Characteristics By Ahmed El-Masry; Dalia El-Mosallamy; Juan Carlos Matallín-Sáez; Emili Tortosa-Ausina
  3. Skill Acquisition in the Informal Economy and Schooling Decisions: Evidence from Emerging Economies By Tumen, Semih
  4. Financial Development, Environmental Quality, Trade and Economic Growth: What Causes What in MENA Countries By Omri, Anis; Daly, Saida; Rault, Christophe; Chaibi, Anissa
  5. The Impact of South-South Trade Agreements on FDI By Mondher Cherif; Christian Dreger
  6. Understanding farmers’ adaptation to water scarcity: a case study from the western Nile Delta, Egypt. By Ghazouani, W.; Molle, F.; Swelam, A.; Rap, E.; Abdo, A.
  7. Estimating the Size of External Effects of Energy Subsidies By Commander, Simon; Nikoloski, Zlatko; Vagliasindi, Maria
  8. What about the OPEC Cartel? By Daniel Huppmann; Franziska Holz
  9. XX Knesset Elections: What these parties stand for, really? By Konstantin Yanovskiy; Ilia Zatcovetsky; Asya Entov
  10. Les déterminants des exportations du Maroc : une investigation empirique sur données de panel. By El Aynaoui, Karim; Ibourk, Aomar

  1. By: Ahmed El-Masry (Faculty of Business, Plymouth University & Mansoura University); Dalia El-Mosallamy (British University in Egypt); Juan Carlos Matallín-Sáez (Department of Finance & Accounting, Universitat Jaume I, Castellón, Spain); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: Islamic funds are an upcoming alternative to conventional funds, aided by the increasing prominence of Islamic finance. This paper contributes to the extant literature by comparing the performance of Islamic and conventional funds during crisis and recovery periods. In contrast to most previous literature, we focus on the countries of the Middle East and North African region (MENA), which represent an appealing context to study both from a financial and socioeconomic point of view due to recent events in the area. To this end, we consider a linear model control- ling for the bias of omitting relevant benchmarks. Although this methodology is now widely accepted in the financial literature, it is less common when evaluating Islamic mutual funds, but it is particularly appropriate when the aim is to focus on markets where Shari’ah-compliant investments are in home territory. Our results show that the relative performance of Islamic and conventional funds must be tempered by several factors such as the (geographical) context in which the investment is made. Considering all the MENA region, Islamic funds perform, on average, slightly worse than conventional funds. However, if the analysis is restricted to GCC countries, the result is the opposite. This evidence holds for both crisis and recovery periods. In addition, the performance gap between the two types of funds either widens or shrinks when considering recovery or crisis times, reinforcing the views that Islamic funds are more stable in hazardous times.
    Keywords: GCC, Islamic funds, MENA, performance
    JEL: G11 G12 G14 G23
    Date: 2015
  2. By: Hasan Engin Duran (TIzmir Institute of Technology,Department of City and Regional Planning, Urla-Izmir, Turkey)
    Abstract: Regional employment volatility is an undesirable phenomenon which describes a strongly fluctuating pattern of employment, thus, "instability" of a local economy. In the literature on this field, much of the attention has been paid to two main issues. First, a group studies has investigated the evolution of national economic volatility and searched for a tendency towards the moderation or amplification of economic cycles. Second, strand of scholars has analyzed the socio-economic and geographical determinants behind the cross-regional variation of volatility. However, far little attention has been devoted to understanding the causes and consequences of this phenomenon in developing countries So, aim of the present study is actually two fold. First, we analyze the cross-regional determinants of employment volatility in Turkey and decompose relative importance of the sources of employment growth shocks. Second, we examine the relationship between regional instability and economic convergence. In terms of methodology, we use a range of panel data, time series models and nonparametric tools such Random Effects Model; PANEL VAR model and Conditional Kernel Density Estimations. We adopt employment data and many other explanatory variables for NUTS-II level regions and over a period 2004-2013. Our analyses indicate three main results: First ,there are huge differences across regions in employment volatility. Second, volatility of regions is mostly related to demographic and market size characteristics of the regions. So, regions which have high rate of labor market participation (with active labor force) and moderated growth rates; the ones which constitute greater market area tend to experience relatively more smoothed employment pattern and, thus, enjoy a stable economy. Moreover, we have shown that regional economic shocks are mostly driven by region specific disturbances rather than purely nationwide or sectoral shocks. Third, regional instability is found as an important barrier against the fulfillment of economic convergence.
    Date: 2015
  3. By: Tumen, Semih
    Abstract: Informal jobs offer skill acquisition opportunities that may facilitate a future switch to formal employment for young workers. In this sense, informal training on the job may be a viable alternative to formal schooling in an economy with a large and diverse informal sector. In this paper, I investigate if these considerations are relevant for the schooling decisions of young individuals using panel data on 17 Latin American countries as well as micro-level data for Turkey. Specifically, I ask if the prevalence of informal jobs distort schooling attainment. I concentrate on three measures of schooling outcomes: (1) secondary education enrollment rate, (2) out-of-school rate for lower secondary school, and (3) tertiary education graduation rate. I find that the secondary education enrollment rate is negatively correlated with the size of the informal economy, while the out-of-school rate is positively correlated. This means that informal training on the job may be crowding out school education in developing countries. The tertiary education graduation rate, however, is positively correlated with the size of informal sector, which implies that a large informal economy induces college attendance for those who are more likely to succeed. Policies that can potentially affect the size of the informal sector should take into consideration these second-round effects on aggregate schooling outcomes.
    Keywords: Informal economy; skill acquisition; schooling outcomes; Latin America; Turkey.
    JEL: E26 I21 J24 O17
    Date: 2015–03–16
  4. By: Omri, Anis (University of Sfax); Daly, Saida (University of Sfax); Rault, Christophe (University of Orléans); Chaibi, Anissa (IPAG Business School)
    Abstract: This paper examines the relationship between financial development, CO2 emissions, trade and economic growth using simultaneous-equation panel data models for a panel of 12 MENA countries over the period 1990-2011. Our results indicate that there is evidence of bidirectional causality between CO2 emissions and economic growth. Economic growth and trade openness are interrelated i.e. bidirectional causality. Feedback hypothesis is validated between trade openness and financial development. Neutrality hypothesis is identified between CO2 emissions and financial development. Unidirectional causality running from financial development to economic growth and from trade openness to CO2 emissions is identified. Our empirical results also verified the existence of environmental Kuznets curve. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development and to improve the environmental quality.
    Keywords: financial development, CO2 emissions, trade, economic growth, simultaneous-equation models
    JEL: E44 E58 F36 P26
    Date: 2015–02
  5. By: Mondher Cherif; Christian Dreger
    Abstract: The integration of emerging markets into the global economy is heavily promoted by foreign direct investment (FDI) inflows. Within the factors driving the location of FDI, regional trade agreements (RTAs) become increasingly relevant for emerging markets. We explore the impact of South-South trade agreements on FDI by dynamic panel models. The MENA countries are compared to the better performing regions in Latin America and Southeast Asia. Several striking results emerge from the analysis. First, agglomeration effects are weaker for the MENA region. Second, the impact of the RTA is important. However, RTAs do not generally rise the attractiveness of the region for foreign investors, as the effect interacts with business-friendly regulations. Third, financial deepening in the host country is a crucial factor, often again in combination with the institutional framework. Furthermore, institutional conditions may not be relevant per se, but only in terms of its interaction with the macroeconomic determinants
    Keywords: MENA Region, foreign investment, South-South trade agreements
    JEL: F15 F21 E22
    Date: 2015
  6. By: Ghazouani, W.; Molle, F.; Swelam, A.; Rap, E.; Abdo, A.
    Keywords: Case studies; Profitability; Cost benefit analysis; Pumps; Drainage water; Food security; Irrigated farming; Irrigation water; Yields; Crop management; Conflict; Adaptation; Farmers; Canals; Deltas; Water availability; Water scarcity
    Date: 2014
  7. By: Commander, Simon (IE Business School, Altura Partners); Nikoloski, Zlatko (London School of Economics); Vagliasindi, Maria (World Bank)
    Abstract: It is widely accepted that the costs of under-pricing energy are large, whether in advanced or developing countries. This paper explores how large these costs can be by focussing on the size of the external effects that energy subsidies in particular generate in two important sectors – transport and agriculture – in two MENA countries, Egypt (transport) and Yemen (agriculture). Our focus is mainly on the costs associated with congestion and pollution as well the impact of under-priced energy for depletion of scarce water resources including through crop selection. Quantifying the size of external effects in developing countries has received relatively little analytical attention, although there is a significant body of literature for the advanced world. By building on earlier research, as well as employing the UN ForFITS model we are able to provide indicative estimates of the external costs of energy subsidies, as manifested in congestion and pollution. Our estimates using simulations indicate that these costs could be materially reduced by elimination or reduction of energy subsidies. We are also able to describe the impact of energy subsidies on water consumption in a region where water resources are particularly limited. As such, our findings provide further evidence of the adverse and significant consequences of subsidising energy.
    Keywords: energy subsidies, pollution, congestion, health effects of energy subsidies
    JEL: O13 R41 Q41 Q53 I15
    Date: 2015–02
  8. By: Daniel Huppmann; Franziska Holz
    Abstract: The recent decision by the Organization of the Petroleum Exporting Countries (OPEC) not to decrease their output quota in spite of a drastic decline of crude oil prices has brought renewed attention to this supplier group dominating the crude oil market. However, the empirical evidence that OPEC truly acts as a textbook cartel is rather limited. This Roundup summarizes the theories proposed over the past decades to explain the fundamental structure of the crude oil market and the role of OPEC and Saudi Arabia, the pivotal supplier. The consensus in the academic literature points towards the interpretation that the group is acting as a non-cooperative oligopoly. We relate the theories to alternative interpretations of the price drop over the autumn of 2014.
    Date: 2015
  9. By: Konstantin Yanovskiy (Gaidar Institute for Economic Policy); Ilia Zatcovetsky (Samuel Neaman Institute for Advanced Studies in Science and Technology); Asya Entov (Ariel University of Samaria)
    Abstract: In the paper we provide short review of the main Israeli parties' positions on the key issues. The set of "key issues" is our choice and contains Judicial (legal system) reform, Judea and Samaria status, 2nd amendment right and self-defense, Taxation / spending etc. We provide formal classification of Left and Right parties to test the following hypotheses. Rightist parties' position are less stable and less consistent. The positions' analysis provide some evidences of higher consistency of Leftists' parties position in the Israel and poor ability of Right parties to keep promises. This phenomena explained by general factors (Universal Suffrage gradually pushes voter to the Lefts) and local factors. Real power of elected, accountable bodies in the Israel is significantly less and power of self-reproducing court system, public media and governmental bureaucracy higher than in majority old democracies.
    Keywords: political platform, consistent position, Right-Left cleavages, pure public goods
    JEL: D72 D73
    Date: 2014
  10. By: El Aynaoui, Karim; Ibourk, Aomar
    Abstract: This paper assesses, using a panel data model, the determinants of Morocco’s exports. Estimates are conducted for 9 different categories of products. The model takes into account observed and non-observed individual heterogeneity. The results show that for most of the groups of exported products, their volume is positively linked to the income of Morocco's main trading partners while it is negatively affected by an appreciation of the real exchange rate.
    Keywords: Morocco; Exportations; Exports; Panel data model
    JEL: F1 F10 F14 F17
    Date: 2014

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