nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒05‒30
twelve papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The Causal Relation between Savings and Economic Growth: An Empirical Analysis By Bassam AbuAl-Foul
  2. Import Dependency in Turkey: an Input-Output Analysis By Osman Aydogus; Cagacan Deger; Elif Tunali Caliskan; Gulcin Gurel Gunal
  3. Globalization, the environment and the future “greening” of Arab politics By Tausch, Arno
  4. Financial Liberalization, Banking Crisis and Economic Growth in MENA Region: Do Institutions Matter? By RACHDI, Houssem; Hakimi, Abdelaziz; Hamdi, Helmi
  5. Bank Competition and Risk Appetite: Evidence from Tunisia By ZAGHDOUDI, Khemais; HAMDI, Helmi; DKHILI, Hichem; HAKIMI, Abdelaziz
  6. Economic integration in the time of turmoil By Uri Dadush
  7. Energy Use and Economic Growth in Jordan By Bassam AbuAl-Foul
  8. Does Financial Development Induce Economic Growth in UAE? The Role of Foreign Direct Investment and Capitalization By SBIA, Rashid; Al Rousan, Sahel
  9. The Inheritance of Educational Inequality among Young People in Developing Countries By Pastore, Francesco; Roccisano, Federica
  10. Do Stock Returns Provide a Good Hedge Against Inflation? An Empirical Assessment Using Turkish Data during Periods of Structural Change By Akturk, Halit
  11. Multiple dimensions of regional variation of impoverishment in Iran By Mahoozi, Hosnieh
  12. Politiques Publiques, Transformation Industrielle, Croissance et Emploi au Maroc : Une Analyse Quantitative By Pierre-Richard Agénor; Karim El Aynaoui

  1. By: Bassam AbuAl-Foul
    Abstract: This paper examines the causal relation between savings and economic growth for Morocco and Tunisia using Autoregressive Distributed Lag (ARDL) approach to cointegration. The results support bidirectional causality between economic growth and savings growth for Morocco. However, for Tunisia, the results suggest a unidirectional causality from saving growth to economic growth.
    Keywords: Cointegration, ARDL approach, Savings and Economic Growth, Causality, MENA region.
    JEL: C50 C51 E20 O40
  2. By: Osman Aydogus (Department of Economics, Ege University); Cagacan Deger (Department of Economics, Ege University); Elif Tunali Caliskan (Department of Economics, Ege University); Gulcin Gurel Gunal (Department of Economics, Ege University)
    Abstract: Import dependency is important for the development process. High import dependency implies, among many items, a vulnerability to foreign exchange shocks. This study examines the intermediate inputs import dependency of Turkish economy. Main contribution is the construction of an import matrix for year 2008, whereas the most recent official one is from year 2002. The analysis reveals dependency of Turkish economy on especially raw material inputs obtained from abroad.
    Keywords: input-output models, import dependency, Turkey
    JEL: C67 F10 O50
    Date: 2015–05
  3. By: Tausch, Arno
    Abstract: The pressures of globalization, rising ecological footprint and shrinking biocapacity and concomitant global value change will contribute towards an increase of the importance of environmental issues in the Arab world in the coming years. Without question, already the time series data from available indices – like the KOF-Index of Globalization (2015) and Ecological Footprint Network data on ecological footprint and biocapicity - all point in the direction that in objective terms the Arab World will be confronted by a synchronous increase of these phenomena in the coming years. In addition, the newly available opinion data from the recently released World Values Survey (6) for twelve members of the Arab League (Algeria, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Palestinian Territories, Qatar, Tunisia, and Yemen), containing almost 70% of the population of the countries of the Arab League show to us that membership rate environmental organizations, participation in environmental demonstrations and giving priority to protecting the environment over economic growth are already a factor in those countries. Their weight will increase in the years to come, given the general and very robust underlying tendencies. Our article analyzes the empirical relationship between rising globalization and ecological performance by establishing the global long-term, structural macro-quantitative determinants of environmental performance in the world system with cross-national data. In multiple standard OLS regression models, we test the effects of 26 standard predictor variables, including the ‘four freedoms’ of goods, capital, labor and services, whose weight will all increase in the Arab world in the coming years, on the following indicators of sustainable development  avoiding net trade of ecological footprint gha per person  Carbon emissions per million US dollars GDP  CO2 per capita  Yale/Columbia Environmental Performance Index (EPI)  Global footprint per capita  Happy Life Years  Happy Planet Index  ln (number of people per mill inhabitants 1980-2000 killed by natural disasters per year+1) Our research shows that the apprehensions of quantitative research, critical of neo-liberal globalization are fully vindicated by the significant negative environmental effects of the foreign savings rate. High foreign savings are indeed a driver of global footprint, and are a blockade against a satisfactory Happy Planet Index performance. The new international division of labor is one of the prime drivers of high CO2 per capita emissions. The penetration of economies by foreign direct investments by transnational corporations, which is the master variable of most quantitative dependency theories (MNC penetration), blocks environmental performance (EPI-Index) and several other socially important processes. Worker remittances have a significant positive effect on the Happy Planet Index, and Happy Life Years. In attempting to draw some cautious predictions for the Arab World, the article then evaluates the performance of the Arab countries in this context with our cross-national data and with our analysis of World Values Survey (6) data for the region. While the documented data for the region from the Yale/Columbia EPI Index, which is the best single-shot available global environmental quality indicator today, and the Ecological Footprint Network time series data about rising ecological footprint and shrinking biocapacity in the Arab countries clearly indicate the sharply mounting and pressing environmental policy priorities in the region, the “greening” of Arab civil societies towards a higher degree of environmental consciousness and activism already is also becoming a considerable factor. The overall publics in Qatar and Libya are in the lead, while in the other Arab countries, environmental policy issues will gain considerably in importance in the public mindset as well. Decision makers would be well advised to channel already now these future environmental debates and movements to be expected in a way compatible with the overall well-being, prosperity, democratization and stability of the region.
    Keywords: International Relations and International Political Economy; International Migration; Agricultural and Natural Resource Economics - General
    JEL: F22 F5 Q00
    Date: 2015–05–21
  4. By: RACHDI, Houssem; Hakimi, Abdelaziz; Hamdi, Helmi
    Abstract: The main purpose of this study is to investigate the interaction between financial liberalization, banking crisis and economic growth by taking into consideration the role of institutions. Our sample covers ten Middle East and North African (MENA henceforth) observed during the period 1990-2013. Using a dynamic panel data framework, our findings reveal that financial liberalization increases the likelihood of systemic banking crisis at the initial stages of financial reform, but there is a threshold level after which financial liberalization can have a positive impact on economic growth by reducing the probability of crisis. The results also suggest that all indicators of institutions play a less significant role in economic growth.
    Keywords: Economic growth, financial liberalization, institutions and MENA countries
    JEL: E44 F36 G21 G28
    Date: 2015–05–23
  5. By: ZAGHDOUDI, Khemais; HAMDI, Helmi; DKHILI, Hichem; HAKIMI, Abdelaziz
    Abstract: In this paper, we investigate whether bank competition increases risk taking for the case of the Tunisian banks. Our data set covers nine Tunisian banks observed during the period from1980 to 2009 and we conducted an econometric model based on panel data estimations. The econometric results reveal the presence of a positive relationship between competition and bank risk taking. This shows that the functions of Tunisian banks remain based on the basic traditional activities and banks need to diversify their activities in safe functions to keep the banking sector stable and avoid bank failure.
    Keywords: Bank competition, Tunisian banks, Bank risk taking, Panel data analysis.
    JEL: G21 L11
    Date: 2015–05–19
  6. By: Uri Dadush
    Abstract: Economic integration is crucial in order to achieve rapid and sustainable growth. However, instabilities in the MENA region and the recent plunge in oil prices may stifle the economic progress in some of these countries, and threaten their attempts at integration. Within this context, this note seeks to analyze the efforts of integration that MENA countries have undertaken, particularly through trade agreements; and to articulate some principles that can help guide the ongoing search for long-term solutions to the region’s growth and integration issue .
    Date: 2015–05
  7. By: Bassam AbuAl-Foul
    Abstract: The purpose of this research is to investigate the causal relation between energy use and economic growth in one of the MENA countries, Jordan using annual data over the period 1975-2007. The methodology used in this study follows Toda and Yamamoto (1995) procedure in order to test the Granger causality between economic growth and energy use. The empirical results reveal that economic growth Granger causes energy use in Jordan. Thus, these findings lend support to the hypothesis that economic growth positively affects energy use therefore energy conservation policy may not slow the growth in the economy.
    Keywords: Energy use, Economic growth, Causality, Jordan
  8. By: SBIA, Rashid; Al Rousan, Sahel
    Abstract: This paper investigates the relationship between financial development and economic growth in case of UAE over the period of 1975Q1-2012Q4. The issue of unit root properties of the variables is solved by employing structural break unit root test. We have employed Bayer-Hanck combined cointegration to test the long run relationship between the variables. Our analysis revealed the existence of cointegration between financial development and economic growth. Financial development induces economic growth. Foreign direct investment stimulates economic growth. Capitalization also increases economic growth. This paper suggests using foreign direct investment appropriately redesigning financial policy for sustainable economic growth in long span of time.
    Keywords: Financial Development, FDI, Capital Investment, Economic Growth, UAE, GCC, MENA.
    JEL: C32 E22 E62 F43 G18 G28
    Date: 2015
  9. By: Pastore, Francesco (University of Naples II); Roccisano, Federica (Catholic University Milan)
    Abstract: This letter provides new evidence on the extent of the inheritance of educational inequality in the eight developing countries (Azerbaijan, China, Egypt, Iran, Kosovo, Mongolia, Nepal, Syria) where the ILO carried out the first wave of School-to-Work Transition survey. We observe different patterns of correlation between the level of intergenerational mobility, the educational upgrade and the role of parents' in sons' and daughters' education.
    Keywords: intergenerational mobility, educational persistence, developing economies
    JEL: D63 H52 I24 P46 P52
    Date: 2015–05
  10. By: Akturk, Halit
    Abstract: This paper provide empirical evidence on the relation between stock returns and inflationary expectations using a panel of firm level data covering a broad range of industries and Turkish common stock market index from 1986 to 2013. I use survey of inflationary expectations to examine Fisher hypothesis where I show, no matter the data is aggregate or disaggregated; ex-ante inflationary expectations and stock returns are positively related, whereas ex-post inflationary realizations are negatively related. I find that holding stocks of manufacturing industry firms provide for about 15% better hedge in comparison to that of service industry firms.
    Keywords: Fisher effect; stock returns; hedging; inflation
    JEL: E31 E43 G15
    Date: 2014–07
  11. By: Mahoozi, Hosnieh
    Abstract: Concerning the demands of Sen's (1987) Capabilities Approach to assessment of human wellbeing, the paper estimates the values of frequency and breadth of multidimensional poverty in Iran. It distinguishes specific regions as Tehran, other urban areas, and rural areas and it reveals that the proportion of rural areas in multidimensional poverty has increased from 1999 to 2007, in spite of relatively high rate of GDP growth in that period. It also detects the specific socio-economic group's deprivation type which is invaluable information for effective policy targeting.
    Keywords: multi-dimensional poverty,welfare distribution,Iran
    JEL: D63 O53
    Date: 2015
  12. By: Pierre-Richard Agénor; Karim El Aynaoui
    Abstract: Cet article présente une analyse quantitative, dans le cadre d’un modèle à générations imbriquées, des relations entre la transformation industrielle, la croissance économique et l’emploi, ainsi que du rôle des politiques publiques dans ce contexte. Le modèle tient compte des activités d’imitation et d’innovation, du système éducatif, du capital public en infrastructure de base et infrastructure avancée, des distortions du marché du travail, et d’une relation bidirectionnelle entre les investissements directs étrangers et la qualité du capital humain. La solution stationnaire du modèle est calibrée pour le Maroc et une séries de simulations de politiques économiques individuelles (une hausse de l’investissement en infrastructure, une réforme du système éducatif, une réduction du degré d’indexation des salaires, une politique de promotion de la migration de travailleurs qualifiés, une hausse des investissements directs étrangers, et une politique d’amélioration du climat des affaires), ainsi que plusieurs programmes intégrés de réformes, sont analysées.
    Date: 2014–04

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