nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒10‒17
eight papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Is There an Informal Employment Wage Penalty in Egypt? By TANSEL, Aysit; Keskin, Halil Ibrahim; Ozdemir, Zeynel Abidin
  2. How Does Bank Competition Affect Solvency, Liquidity and Credit Risk? Evidence from the MENA Countries By Raja Almarzoqi; Sami Ben Naceur; Alessandro Scopelliti
  3. Role of Instant Messenger in Turkish People Life By Bağkur, Mehmet
  4. Does Economic Growth Reduce Child Malnutrition in Egypt? New Evidence from National Demographic and Health Survey By Rashad, Ahmed; Sharaf, Mesbah
  5. Modeling Causality between Financial Deepening and Poverty Reduction in Egypt By Abosedra, Salah; Shahbaz, Muhammad; Nawaz, Kishwar
  6. A product space perspective on structural change in Morocco By Osorio-Rodarte,Israel; Lofgren,Hans
  7. Food abstention, religious observance and prosocial behavior: evidence from Ramadan By Haruvy, Ernan; Ioannou , Christos A.; Golshirazi, Farnoush
  8. Analysis of Factors Constraining the Competitiveness of Sesame Export in the Sudan By Abdel Karim, Imad Eldin Elfadil

  1. By: TANSEL, Aysit; Keskin, Halil Ibrahim; Ozdemir, Zeynel Abidin
    Abstract: This paper considers the private sector wage earners in Egypt and examine their wage distribution during 1998-2012 using Egyptian Labor Market Panel Survey. We first estimate Mincer wage equations both at the mean and at different quantiles of the wage distribution taking into account observable characteristics. Then we make use of the panel feature of the data and estimate models taking into account unobservable characteristics. We also consider the possibility of nonlinearity in covariate effects and estimate a variant of matching models. In all cases we find a persistent informal wage penalty in the face of extensive sensitivity checks. It is smaller when unobserved heterogeneity is taken into account and larger at the top than at the bottom of the conditional wage distribution. We also examine the informal wage penalty over time during the study period and in different groups according to experience and education. The informal wage penalty has increased recently over time and is larger for the better educated but smaller for the more experienced.
    Keywords: Formal and informal wage gap; Formal and informal employment; Panel data; Egypt.
    JEL: J3 J31
    Date: 2015–10–03
  2. By: Raja Almarzoqi; Sami Ben Naceur; Alessandro Scopelliti
    Abstract: The paper analyzes the relationship between bank competition and stability, with a specific focus on the Middle East and North Africa. Price competition has a positive effect on bank liquidity, as it induces self-discipline incentives on banks for the choice of bank funding sources and for the holding of liquid assets. On the other hand, price competition may have a potentially negative impact on bank solvency and on the credit quality of the loan portfolio. More competitive banks may be less solvent if the potential increase in the equity base—due to capital adjustments—is not large enough to compensate for the reduction in bank profitability. Also, banks subject to stronger competitive pressures may have a higher rate of nonperforming loans, if the increase in the risk-taking incentives from the lender’s side overcomes the decrease in the credit risk from the borrower’s side. In both cases, country-specific policies for market entry conditions—and for bank regulation and supervision—may significantly affect the sign and the size of the relationship. The paper suggests policy reforms designed to improve market contestability and to increase the quality and independence of prudential supervision.
    Keywords: Saudi Arabia;North Africa;Oman;Libyan Arab Jamahiriya;Bank liquidity;United Arab Emirates;Qatar;Financial stability;Competition;Middle East;Liquidity;Jordan;Kuwait;Lebanon;Egypt;Credit risk;Bahrain;Banking systems;Banks;Bank Competition, Solvency, Bank Regulation, Supervision, bank, risk, banking, credit, Government Policy and Regulation, Corporation and Securities Law, Bank Regulation and Supervision,
    Date: 2015–09–29
  3. By: Bağkur, Mehmet
    Abstract: Instant Messaging is being widely adopted in modern people life and a number of IM applications are existing in the market. The number of functions and features increase in IM’s make it more popular every single day in human life. There are number of IM’s in the market and people prefer to use one or more than one of them according to their usage and preferences. This study focus on 2 aspects of Instant Messenger. The first aspect is the use of IM, including the activities people do with IM, the routines they use it, and collaboration. The second aspect is peoples’ preferences, including people’s perceived benefits of the application, problems they encounter, and ways in which they handle the problems. This study uses surveys as an evaluation method. The surveys are consisted of a consent form, demographic information part, and the questions part. Moreover, the surveys, which are created and launched by Kwik Surveys, are conducted online. Participants are provided with a link generated by the website to the survey. There are 65 participants in total who have taken part in the survey, and 49 participants have completed it. Most of the participants agree that they use IM frequently, have a good user experience, and it has improve their life. However, they also encounter some problems with IM which raise dissatisfaction. The report gives some key recommendations for redesign, such as improving the quality of service and system robustness, meliorate the current functions, add new functions, and integrate and interoperate with other software.
    Keywords: Instant Messenger, IM, Turkish users
    JEL: H80
    Date: 2015–06
  4. By: Rashad, Ahmed (Philipps-Universität Marburg); Sharaf, Mesbah (University of Alberta, Department of Economics)
    Abstract: Economic growth has been widely considered an effective instrument to combat poverty, and child malnutrition. Though there is a substantial literature on the relationship between economic growth and child malnutrition in a wide range of countries, empirical evidence on this relationship is sparse in the case of Egypt. Using repeated cross sectional data from the National Demographic and Health Survey, we examine the association between income per-capita growth, at the governorate level, and child malnutrition outcomes; stunting, wasting, and underweight, in Egypt during the period 1992-2008. The association between child malnutrition and economic growth is examined within a multivariate framework using a logistic multilevel modeling approach to account for the multilevel structure of the data, and the clustering of observations. Statistics show that 29% of the children-under-5 years were stunted, 7.2% were wasted, and 6% were underweight in 2008. Results reveal that child, and household-level characteristics are more important than aggregate economic conditions (as proxied by economic growth and Gini index of income inequality) in explaining malnutrition rates in Egypt. In particular, Child age, sex, birth interval of the child, parent’s education, and household economic status are particularly important determinants of malnutrition outcomes. Results show a modest reductive effect of economic growth on child underweight and wasting rates, while the effect on stunting rates was not statistically significant. Though economic growth could be a necessary condition for combating child malnutrition, this paper shows that economic growth by itself is not sufficient and has to be complemented by other intervention measures that aim directly at improving child health and nutrition.
    Keywords: Economic growth; Malnutrition; Stunting; Egypt
    JEL: I14 I15
    Date: 2015–10–14
  5. By: Abosedra, Salah; Shahbaz, Muhammad; Nawaz, Kishwar
    Abstract: This study deals with the linkages between financial development and poverty reduction in Egypt using data for the period of 1975Q1-2011Q4. The stationarity properties of the variables are tested by applying Zivot-Andrews structural break unit root test. The structural break autoregressive distributed lag-bounds testing approach to cointegration is used to examine long run relationship between the variables. Our results show evidence of cointegration which confirms the presence of long run relationship between financial deepening, economic growth and poverty reduction. The VECM Granger causality results are somewhat interesting. The findings indicate that financial development reduces poverty when domestic credit to private sector is used as proxy for financial development. The direct channel that financial sector development can lead to enabling the poor to access or broaden their access to financial services, such as credit and insurance-risk services, is therefore confirmed in case of Egypt. Furthermore, the indirect channel where financial sector development contributes to poverty reduction through economic growth is also confirmed for Egypt. This is only found when M2 is used as a proxy for financial development and infant mortality per capita as proxy for poverty. We find that the causal relationship between financial development and poverty reduction is sensitive to the proxy used to measure the level of financial development and the level of poverty. When the domestic credit to the private sector is used as a proxy for financial development, causality is found to prevail between financial development and poverty reduction in short run. However, when the broad money supply is used as a proxy, we find that financial development causes growth which in turn causes poverty reduction. These results show that the poverty-reduction programs are desirable not only because they reduce poverty but also because they possibly lead to further development of financial sector in long run. Furthermore, our results show that appropriate reforms aimed at developing a financial sector in Egypt that is well-organized and spread throughout the country can help reduce poverty by availing more domestic credit to the poor.
    Keywords: Financial Deepening, Poverty, Growth
    JEL: C5
    Date: 2015–10–04
  6. By: Osorio-Rodarte,Israel; Lofgren,Hans
    Abstract: Drawing on international trade data, this paper uses the product space approach to analyze changes in Morocco?s goods exports in 1990?2010 and future export priorities. The level of Morocco?s gross domestic product and its moderate growth match the predictions of product space analysis, informed by changes in the income potential of Morocco?s export basket, reflecting relatively strong capabilities (a high density) in products with relatively low potentials in income and diversification. Morocco?s peripheral position in the product space map matches its slow growth and points to the difficulty of diversification into more sophisticated products. Encouraging changes since 1990 include the development of a revealed comparative advantage for medium- and high-tech manufactures, which in 2010 represented around 40 percent of total goods exports. However, the number of goods involved is relatively small and this transformation has not sufficed to raise per capita growth to the average for middle-income countries. Export projections up to 2025 suggest that future developments will follow the trends of the past. Among sectors, high growth is likely for phosphate-based fertilizer exports. However, like edible oil products, which also may grow rapidly, phosphates are hampered by low income and diversification potentials. Along with various other manufactured products, electronics and the automotive industry are promising sectors that may offer more lasting positive contributions to Morocco?s future development. Beyond goods, Morocco?s policy makers should also consider the potential contributions of service exports, which in recent years have enjoyed rapid growth.
    Keywords: Agribusiness&Markets,Commodities,Economic Theory&Research,Markets and Market Access,Water and Industry
    Date: 2015–10–14
  7. By: Haruvy, Ernan; Ioannou , Christos A.; Golshirazi, Farnoush
    Abstract: Does food intake affect prosocial behavior? Extant knowledge suggests that food intake increases prosocial behavior. But this may not be universally true, especially when religious fasting holidays are concerned. We investigate experimentally the impact of religious fasting in the Islamic holy month of Ramadan on prosocial behavior. Our sample consists of male factory workers in a manufacturing facility in Iran. Each worker is asked to allocate an amount of money between himself and a stranger. Strikingly, the effect of food intake is reversed during the holy month of Ramadan. Workers who are in the midst of their Ramadan fast are far more generous to recipients than workers who have had their evening meal, and more generous than fasting and non-fasting workers outside Ramadan. Interestingly, workers who have had their evening meal during Ramadan are statistically indistinguishable from non-fasting workers outside of Ramadan. Our �findings suggest that it is the interaction of food abstention with the ritual of fasting and religious observance that ampli�es prosocial behavior.
    Date: 2015–09–05
  8. By: Abdel Karim, Imad Eldin Elfadil
    Abstract: The paper analyzed sesame export performance and competitiveness and its main constraints in Sudan. Vector error correction model was applied using data from 1970-2014. The results showed that low yield, area variation and unstable fluctuating exchange rate are the main factors affecting sesame export earnings in the long run, and area variation in the short run. Improvement of sesame yield and stabilized exchange rate will have positive impact on sesame export value in the long run, while expansion of area under sesame production could have negative influence on sesame export value due to Sudan large share of sesame export in the world market. In order to improve foreign exchange earnings from sesame export, Sudan should address the problem of low yield, area variation and fluctuating exchange rate especially in the long run. The paper recommends adopting economic policies that lead to improvement of sesame yield, control of area under sesame production and to stabilize exchange rate of Sudanese currency.
    Keywords: Sesame export, Competitiveness, Constraints, Sudan, Agricultural and Food Policy, Crop Production/Industries, International Relations/Trade, Land Economics/Use, Production Economics, Productivity Analysis,
    Date: 2015–10–08

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