nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒06‒27
nine papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Impact of Arab uprising on Portfolio diversification benefits at different investment horizons for the Turkish investors in relation to the regional stock markets: Multivariate GARCH-DCC and Wavelet coherence approaches By Buriev, Abdul Aziz; Masih, Mansur
  2. Fertility transition in Turkey?who is most at risk of deciding against child arrival ? By Greulich,Angela; Dasre,Aurélien; Inan,Ceren
  3. Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries By Riham Ahmed Ezzat
  4. Political connections and tariff evasion : evidence from Tunisia By Rijkers,Bob; Baghdadi,Leila; Raballand,Gael J. R. F.
  5. How costly are labor gender gaps ? estimates for the Balkans and Turkey By Cuberes,David; Teignier,Marc
  6. Exploring the link between innovation capability and financial performance By Salih Ye; Ahmet Kaya
  7. Determinants Of User Satisfaction With Mobile Applications: Case Of Facebook As A Mobile App In Turkey By Fatma Zeynep Özata
  8. The socioeconomic impacts of energy reform in Tunisia : a simulation approach By Cuesta Leiva,Jose Antonio; El Lahga,Abdelrahmen; Lara Ibarra,Gabriel
  9. Energy subsidies reform in Jordan : welfare implications of different scenarios By Atamanov,Aziz; Jellema,Jon Robbert; Serajuddin,Umar

  1. By: Buriev, Abdul Aziz; Masih, Mansur
    Abstract: The current political changes in the Arab countries have raised concerns about the behaviour of stock markets in the region. It brings an expectation of distortions in the behaviour of the regional financial markets. This study aims at analysing the dynamic relationship between Middle Eastern and North African equity markets exposed to the Arab Spring, namely Turkey, Egypt, Oman, and Lebanon, using Multivariate GARCH-DCC and Wavelet Coherence techniques on weekly data spanning from 2005 to 2015. We employ Multivariate GARCH-DCC to find out the time-varying volatilities and correlations between the markets, and Wavelet Coherence based on Continuous Wavelet Transform followed by the multiscale variance, covariance, and correlations based on Maximal Overlap Discrete Wavelet Transform are used for multi-resolution analysis to see the pattern of interactions between the stock markets across the time-scales: low, medium, and high. The findings tend to suggest that the correlations between the stock markets are quite low all over the period: on average, about 4% until the Global Financial Crisis and 10% afterwards. In general, the volatilities are relatively stable, except for the global financial turmoil period. In particular, equity markets of Lebanon and Egypt display a slightly higher volatility during the Arab Spring. It means that the Turkish investors who have allocated their investments in major trading partners like Egypt may not experience great diversification benefits for almost all investment horizons related to higher trade intensity but moderate benefits arise for Lebanon up to the investment horizons of 32-64 days and longer. However, portfolio diversification benefits are greater if Turkish investors invest in the Oman stock index except during long investment horizons. As for the long run, stock holding periods exceeding 32-64 days have minimal benefits for portfolio diversification. As an implication, Turkish investors should carry out the reassessment of their stock exposures and investment horizons more frequently.
    Keywords: Arab uprisings, portfolio diversification, MGARCH-DCC, Wavelet Coherence
    JEL: C22 C58 G11
    Date: 2015–06–24
  2. By: Greulich,Angela; Dasre,Aurélien; Inan,Ceren
    Abstract: In Turkey, female employment and education are still relatively low, while fertility levels are high compared with other European countries. However, Turkey stands just at the edge of an important social transition. Increasing female education and employment come along with important decreases in fertility. By mobilizing census and survey data, this paper finds that fertility decreases are mainly caused by fewer transitions to a third birth. Graduate women participating in the formal labor market are most at risk of deciding against child arrival in comparison with inactive or unemployed women. The third rank is particularly concerned, as women?s income contribution seems to be crucial for many families that already have two children, and the arrival of a third child risks reducing or stopping women?s working activities in the absence of institutional childcare support. Policies enabling women to combine work and family life, which have been proven effective in other European countries, emerge as useful to avoid a further fertility decline below replacement level in Turkey.
    Date: 2015–06–16
  3. By: Riham Ahmed Ezzat (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, FEPS - Faculty of Economics and Political Science)
    Abstract: Since the 1980s, developing countries started adopting telecom reforms due to pressures from international institutions. However, Middle East and North African (MENA) countries lagged in adopting such reforms. Even after introducing telecom reforms in the MENA region beginning in 1995, not all countries became better off in terms of various performance indicators. Therefore, this paper empirically assesses the effects of regulation, privatization and liberalization reforms, as well as their simultaneous presences, in the telecommunication sector on the sector's performance using a sample of 17 MENA countries for the period 1995-2010. We assume that different reforms are affected by institutional, political and economic variables with respect to the level of democracy, the legal origin, the natural resources rents per country and the year of independence from colonization. We correct for the endogeneity of telecom reforms, and we use IV-2SLS (Instrumental Variable-Two Stages Least Squares) estimation to analyze their effect on telecom performance in terms of access, productivity and affordability. We find that the privatization of the main incumbent operator and the fixed-line market's liberalization affect the sector's performance negatively in terms of fixed access and affordability. Moreover, we find that the simultaneous presence of an independent regulator and a privatized incumbent helps to eliminate the drawbacks on the sector performance resulting from privatization. However, the simultaneous presences of the other reforms in terms of regulation-competition and privatization-fixed competition do not help to improve the sector's performance.
    Date: 2015–04
  4. By: Rijkers,Bob; Baghdadi,Leila; Raballand,Gael J. R. F.
    Abstract: Are politically connected firms more likely to evade taxes? This paper presents evidence suggesting firms owned by President Ben Ali and his family were more prone to evade import tariffs. During Ben Ali?s reign, evasion gaps, defined as the difference between the value of exports to Tunisia reported by partner countries and the value of imports reported at Tunisian customs, were correlated with the import share of connected firms. This association was especially strong for goods subject to high tariffs, and driven by underreporting of unit prices, which diminished after the revolution. Consistent with these product-level patterns, unit prices reported by connected firms were lower than those reported by other firms, and declined faster with tariffs than those of other firms. Moreover, privatization to the Ben Ali family was associated with a reduction in reported unit prices, whereas privatization per se was not.
    Keywords: Trade Policy,Debt Markets,Microfinance,Markets and Market Access,International Trade and Trade Rules
    Date: 2015–06–24
  5. By: Cuberes,David; Teignier,Marc
    Abstract: In this paper, survey data are used to document the presence of gender gaps in self-employment, employership, and labor force participation in seven Balkan countries and Turkey. The paper examines the quantitative effects of the gender gaps on aggregate productivity and income per capita in these countries. In the model used to carry out this calculation, agents choose between being workers, self-employed, or employers, and women face several restrictions in the labor market. The data display very large gaps in labor force participation and in the percentage of employers and self-employed in the labor force. In almost all cases, these gaps reveal a clear underrepresentation of women. The calculations show that, on average, the loss associated with these gaps is about 17 percent of income per capita. One-third of this loss is due to distortions in the choice of occupations between men and women. The remaining two-thirds corresponds to the costs associated with gaps in labor force participation. The dimensions of these gender gaps and their associated costs vary considerably across age groups, with the age bracket 36?50 years being responsible for most of the losses.
    Keywords: Labor Markets,Educational Sciences,Population Policies,Labor Policies,Gender and Development
    Date: 2015–06–22
  6. By: Salih Ye (Kaahmramanmara); Ahmet Kaya (Akdeniz Un,versty)
    Abstract: Today’s global and uncertain business world transform the way business is conducted. Companies need to pay attention to the innovation and innovation capabilities for the survival, success and growth. Innovation provides several strategic advantages (e.g., better performance outcomes, efficiency, productivity and competitive advantages) to all types of organisations. This study focuses on innovation capability and explores its effect on firm financial performance. The hypothesis is drawn from existent related literature. Data is collected from fifty four SMEs operating in Gaziantep city of Turkey and tested through correlation and regression analyses. The results reveal that innovation capability is positively related to sales growth but not to the return on assets. The findings and implications are discussed in relation to theory and previous empirical studies.
    Keywords: Innovation, Innovation Capability, Performance, Financial Performance, SMEs
    JEL: O31 L25 M10
    Date: 2015–06
  7. By: Fatma Zeynep Özata (Anadolu University)
    Abstract: A mobile app is a computer (software) program designed to run on smartphones, tablet computers and other mobile devices (Wikipedia). The increased use of mobile devices and mobile Internet has led to an explosion of the development and download of mobile applications. Businesses started competing to have a mobile application to gain competitive advantage or stay competitive. But despite the success of some, the majority of mobile applications fails outright or is not as successful as expected. So this study aims to define the factors that affect user satisfaction as a success measure of mobile applications. I/S Success Model is used as a basis for this study, and the model is expanded with the constructs related to flow. The research framework includes seven antecedents (system reliability and design, perceived ease of use, content usefulness, content quality, focused attention, perceived enjoyment, and flow) of user satisfaction that were derived from existing information systems, m-commerce and applications literature. The structural equation modeling (SEM) method was applied to evaluate the hypothesized relationships among the constructs in the theoretical model developed. The results of the study showed that system quality and information quality are important determinants of user satisfaction, but flow does not have a direct influence on user satisfaction. The most striking finding of this study is that perceived enjoyment is a significant determinant of satisfaction with mobile applications. Based on the findings, companies involved in m-commerce should focus on not only to improve the usefulness or quality of the system but also the design features of the applications that enhance enjoyment and the experience must also be considered carefully.
    Keywords: M-commerce, Mobile applications, User satisfaction, System quality, Content quality, Flow experience, Perceived enjoyment, Hedonism
    JEL: M31
    Date: 2015–06
  8. By: Cuesta Leiva,Jose Antonio; El Lahga,Abdelrahmen; Lara Ibarra,Gabriel
    Abstract: Tunisian social development policy making has always counted on energy subsidies to play a pivotal role. Due to the increasingly unsustainable budget implications, a new strategy has begun to reform the subsidy system in the energy sector while striking a balance between improving fiscal and equity considerations without increasing social tensions. This paper presents an analysis of the fiscal and distributive consequences of the changes to the subsidy setup announced by the government at the end of 2014. The results show that raising electricity prices for consumers and removing subsidies for other energy sources would lead to a short-term increase in the poverty rate of 2.5 percentage points. In addition, compensation mechanisms that could be readily implemented (such as universal coverage or building on the existing health cards system) will not bring substantive counterweight to the increased poverty, even if all savings of reforms could be perfectly channeled as cash transfers. The analysis suggests that bold reforms of energy subsidies need to be accompanied by equally bold improvements to the targeting schemes of public spending if poverty and disparities are to be substantively reduced.
    Keywords: Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Emerging Markets,Taxation&Subsidies
    Date: 2015–06–17
  9. By: Atamanov,Aziz; Jellema,Jon Robbert; Serajuddin,Umar
    Abstract: Facing a fiscal crisis, Jordan initiated substantial petroleum subsidy reforms in 2012. The government has also long contemplated how to cut electricity subsidies, which surpass the fiscal burdens imposed by the petroleum subsidies. This paper estimates the impacts of the 2012 petroleum subsidies reform on household welfare and government revenues. It also simulates the distributional and fiscal impacts from ending subsidies in the electricity sector, where the pricing structure is more complex than petroleum prices. The paper looks at the direct and indirect impacts of reform. Moreover, the paper discusses the political economy considerations of reform. While the full removal of petroleum subsidies would have increased poverty, the compensatory cash transfer program the government instituted is estimated to have fully offset the negative impact for the poorer population. The impact of reforms in the electricity sector will depend significantly on the implementation method chosen. A flat increase of tariffs toward cost recovery will put a huge burden on the poorest households. However, a progressive increase in tariffs will generate substantial savings for the government, even with compensatory mechanisms to mitigate the strong negative impact on the vulnerable population. The immediate compensation of the losers from reform appears to be a crucial factor in the successful implementation of reforms in Jordan.
    Keywords: Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Emerging Markets,Markets and Market Access
    Date: 2015–06–17

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