nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2017‒04‒16
eleven papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Dynamics of Trade Specialization in Middle East and North Africa (MENA) By Duddy, D, Roesmara; Tri, Widodo; Sri, Adiningsih
  2. Marriage Outcomes and Women Empowerment After Marriage: A Three Countries Story By Hanan Nazier; Racha Ramadan
  3. Remittances And Growth In Tunisia: A Daynamic Panel Analysis From A Sectoral Database By Kouni, Mohamed
  4. Financial Cooperation between Korea and the Middle East in a New Industrial and Financial Environment By Lee , Kwon Hyung; Son , Sung Hyun; Park , Jaeeun
  5. Sustainable Economic Cooperation between Korea and the Middle East in Times of Lower Oil Prices By Lee , Kwon Hyung; Son , Sung Hyun; Jang , Yun Hee; Ryou, Kwang Ho
  6. Has Algeria suffered from the dutch disease?: Evidence from 1960–2013 data By Gasmi, Farid; Laourari, Imène
  7. Inter-city Trade Networks in Turkey: Shocks and Spillovers By Alper Duman
  8. Self-Rated Health and Primary Care Utilization: Is Selection into Healthcare Endogenously Determined? By Firat Bilgel; Burhan Can Karahasan
  9. Impacts of OPEC's political risk on the international crude oil prices: An empirical analysis based on the SVAR models By Hao Chen; Hua Liao; Bao-Jun Tang; Yi-Ming Wei
  10. New and Improved: Does FDI Boost Production Complexity in Host Countries? By Javorcik, Beata; Lo Turco, Alessia; Maggioni, Daniela
  11. Emissions de Dioxyde de Carbone et Croissance Economique au Maroc : Une Analyse de la Courbe Environnementale de Kuznets By Rim Berahab

  1. By: Duddy, D, Roesmara; Tri, Widodo; Sri, Adiningsih
    Abstract: This paper examines the dynamics of trade specialization in the MENA region and countries for the period 2000 and 2010. An econometric model, Wald test, and the Spearman’s rank correlation are applied. By both, industry and country group classifications analysis, all countries in the MENA region have shown de-specialization with different speed, where Qatar has the fastest speed and Tunisia has slowest speed.
    Keywords: comparative advantage, dynamics of specialization, MENA, RSCA, econometric analysis, Wald test, Spearman’s rank correlation
    JEL: F13 F14
    Date: 2017–03–11
  2. By: Hanan Nazier (Cairo University); Racha Ramadan
    Abstract: This paper provides a first step in the analysis of an understudied phenomenon: women’s bargaining power after marriage. Using a Multiple Index Multiple Causes (MIMIC) Model, the paper studies the relationship between women’s bargaining power within her household after marriage and her pre-marital power. This later is reflected in her marriage characteristics; such as the divorce payment, the jewelry she received from her husband in addition to her husband characteristics. The MIMIC model was estimated using the ELMPS (2012) data for Egypt, the JLMPS (2010) for Jordan and the TLMPS (2013) for Tunisia. Results show that empowerment has a significant positive effect on the five decision indicators for the three countries. Moreover, it was evidence that there is considerable difference between the three countries in terms of determinates of post marriage decision-making power. In general, the determinants affecting women’s empowerment in Tunisia are not the same as in Egypt or Jordan. Ultimately, we can conclude that, although pre-marriage bargaining power is playing significant role in women’ post marital empowerment in Egypt and Jordan. It is mainly individual characteristics and husbands’ characteristics that affect women’s post marital empowerment in Tunisia. This could be due to the difference in culture and social context in Tunisia as compared to Jordan and Egypt. This result confirms the importance of norms, traditions and culture factors as causes that affect woman empowerment in general as well as her state after marriage.
    Date: 2017–06–04
  3. By: Kouni, Mohamed
    Abstract: This paper uses a sectoral data set from Tunisia to analyze how the remittances affect the economic growth during over the period from 1987 to 2012. To achieve this objective we use a sectoral database of remittances allocated to investment, in contrast with the majority of studies which have used all the amount of remittances. We assume that using remittances allocated to investment can generate a direct and more significant effect on growth. Our empirical analysis is based on the dynamic panel approach (GMM method) and conducted on a sample of 3 economic sectors (Agriculture, industry and services). The findings of this paper suggest that remittances have significantly contributed to economic growth. In spite of the amount of remittances allocated to investment is smaller than the one allocated to consumption, remittances enhance the share of the sectoral value added in GDP in the economy. Indeed, 1% increase in remittances allocated to investment would increase the VA/GDP ratio by 1% to 4%. The study also finds that investment and Labor constitute the major contributors of the economic growth in Tunisia. However, the technical efficiency is negative. Further, in the Tunisian context characterized by a high unemployment rate and great regional disparities, remittances can play an important role. Therefore, some policy implications can be proposed such as for example an incentive policy to encourage migrants to remit more funds and to invest in productive fields. This can be achieved by reinforcing social networks, reviewing the current remittances fees, and ameliorating the affairs climate essentially at the regional level.
    Keywords: migration, remittances, economic growth, dynamic panel data, GMM method
    JEL: F22 F24 O1
    Date: 2016
  4. By: Lee , Kwon Hyung (Korea Institute for International Economic Policy); Son , Sung Hyun (Korea Institute for International Economic Policy); Park , Jaeeun (Korea Institute for International Economic Policy)
    Abstract: For the financial cooperation between Korea and the Middle East after the global financial crisis and the Arab Spring Korean commercial financial institutions should enhance global financial capability together with policy finance institutions including Korea Development Bank and Korea Eximbank. The second step would be to build the Korea-Middle East financial network in a more systematic manner. To this end, Korean financial institutions should work to raise brand awareness by venturing as actively as possible into local markets. Third, it is advisable to identify investment projects that allow for broader private participation in countries aside from the GCC such as emerging economies in the Middle East, Africa and Central Asia, so as to find opportunities for joint investment.
    Keywords: Financial Cooperation; Middle East; Development Finance
    Date: 2015–10–23
  5. By: Lee , Kwon Hyung (Korea Institute for International Economic Policy); Son , Sung Hyun (Korea Institute for International Economic Policy); Jang , Yun Hee (Korea Institute for International Economic Policy); Ryou, Kwang Ho (Korea Institute for International Economic Policy)
    Abstract: A global oil price decline since the second half of 2014 has negatively impacted the economies of GCC countries, which heavily depend on the oil and gas sector. This led to a decline in trade surpluses and undermined current account balances, resulting in a slowdown of economic growth in these countries. GCC countries are carrying out several policies, as they face slowing economic growth, deepening budget deficits, diminishing foreign investment and shrinking construction project markets due to lower oil prices. In response, a new cooperation framework is required to strengthen bilateral ties for shared growth. First, industrial cooperation should be reinforced to expand economic diversification and job creation in GCC countries. Second, energy security is one of the most significant rationales for bilateral cooperation between Korea and the Middle East, since Korea imports more than 60% of the oil it uses from GCC countries. Third, investment cooperation should be strengthened to facilitate joint investment in the region, including joint ventures. Fourth, institutional cooperation between governments is needed to share experiences and know-how obtained in the process of Korea's institutional reforms in the fields of tax, subsidies, privatization and FDI. Civil servant exchange programs will also contribute to deepening mutual understanding in the bilateral economic partnership.
    Keywords: Economic Cooperation between Korea and the Middle East; Oil Prices; GCC
    Date: 2017–04–05
  6. By: Gasmi, Farid; Laourari, Imène
    Abstract: Algeria is strongly dependent on oil exports revenues to fuel its economy and following the 1986 oil counter-shock this country has experienced a persistent decline of its manufacturing sector. Although it has benefited from high oil prices over the last decades and implemented a myriad of economic reforms, Algeria has failed to develop its manufacturing sector and diversify its economy. One of the main mechanisms through which fluctuations in oil prices can constitute an impediment to the development of the manufacturing sector, and hence to long-term growth, in an economy that heavily relies on a natural resource exports is referred to in the literature as the Dutch disease. This paper aims to test whether or not Algeria’s economy has suffered from the main symptoms of this syndrome by analyzing data covering more than half-a-century. More specifically, we use annual data from 1960 to 2016 and investigate two important implications of this phenomenon that occur following an oil boom, namely, the spending effect and the resource movement effect. We perform some simple tests of these signs of the Dutch disease using a set of regressions while controlling for some other factors that could have led to similar economic symptoms. The results do not allow us to unambiguously claim that the Algerian economy has suffered from the Dutch disease over the period under study.
    Keywords: Algeria, Oil revenues, Manufacturing sector, Dutch disease, Real exchange rate, Economic growth, Time series.
    JEL: C32 O13 O14 O55 Q32 Q43
    Date: 2017–03
  7. By: Alper Duman
    Abstract: Trade among the cities of a country is similar to international trade in various aspects. Recently there is a surge of studies focusing on the network characteristics of international trade. We extend the main idea and the methodology of these studies to the inter-city trade network in Turkey in order to model and trace the network spillovers of a given shock (i.e. intensification of Syrian conflict and hence the drop of income in Southeastern cities) on the overall income and intercity trade volume. ntercity trade can be considered as a network. This trade network can be represented as a directed, weighted, incomplete, and asymmetric graph in which each city is a node and the bilateral trade links are the edges. The network is directed as each city is unlikely to trade at equal amounts from each other. The network is weighted because all links reflect some value of payment that is different for each city and each flow. The network is incomplete as not all cities in Turkey are connected with each other through trade. Finally, the network is asymmetric because for most cities customer partners (out-links) differs from the number of supplier partners (in-links). The ministry of Science, Technology and Industry provides intercity trade data for the year 2013. First we construct the intercity trade network derived from the data. Second we follow, Kireyev and Leonidev (2015) method to model and trace the network spillovers of a given shock (i.e. intensification of Syrian conflict and hence the drop of income in Southeastern cities) on the overall income and intercity trade volume. The main insight of the network modelling approach is the following. Once a source city faces a shock in terms of income loss, its purchases from its first neighbour cities will be affected. Then the these cities will face adverse effects in terms of income and so their neighbour cities will have to bear the spillover effects. This network contagion will have an aggregate effect which will be larger than the direct effect. Ten percent drop in income of the Southeastern cities which constitute about 10 % of the GDP of Turkey will have a significant effect on the overall income and inter-city trade volume in Turkey
    Keywords: Turkey, Modeling: new developments, Trade issues
    Date: 2016–07–04
  8. By: Firat Bilgel (Okan University); Burhan Can Karahasan
    Abstract: This study assesses the causal effects of primary care utilization on subjective health status in Turkey using individual-level data from the 2012 Health Research Survey. Employing recursive bivariate models that take into account the possibility that selection into healthcare might be correlated with the subjective health status of the respondent, we find that selection into primary care is endogenously determined and that the utilization of preventive care significantly improves one’s self-rated health after controlling for sociodemographics, socioeconomic status, health behavior and risk factors and access to healthcare. The distribution of treatment effects suggests significant between- and within-inequalities in health gains from preventive care utilization in disfavor of chronic patients. Analysis also points out that barriers to healthcare access are associated with lower self-rated health and that significant location-based inequalities exist in the utilization of preventive care among chronic patients. GP care utilization however, only exerts a trivial causal effect on self-rated health exclusively among females, rural residents and chronic patients.
    Date: 2017–06–04
  9. By: Hao Chen; Hua Liao; Bao-Jun Tang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: The impacts of OPEC's political risk on the fluctuations of international crude oil prices have caused widespread concern and analyzing the impacts is of great significance to the investment decisions and risk aversion strategies in the crude oil markets. Therefore, using the International Country Risk Guide (ICRG) index as a proxy for the countries' political risk situation, we empirically investigate the impacts of OPEC's political risk on the Brent crude oil prices, based on several Structural Vector Autoregression (SVAR) models. The main empirical results indicate that: (1) The political risk of OPEC countries does have a significant and positive influence on Brent crude oil prices in the sample period from January 1998 to September 2014, and the most significant positive influences appear in about one and a half year and last about a year. (2) The OPEC's integrated political risk contribute to 17.58% of the oil price fluctuations in the sample period, which is only lesser than that of the oil demand shocks (34.64%). (3) Compared with the political risk of OPEC countries in North Africa and South America, the political risk of OPEC countries in Middle East contribute most to the oil price fluctuations. (4) Among the eight components of the political risk in OPEC, the internal conflicts contribute most to the oil price fluctuations in the sample period.
    Keywords: OPEC; Political risk; Oil price; SVAR
    JEL: Q54 Q40
    Date: 2016–10–01
  10. By: Javorcik, Beata; Lo Turco, Alessia; Maggioni, Daniela
    Abstract: This paper examines the relationship between the presence of foreign affiliates and product upgrading by Turkish manufacturing firms. The analysis suggests that Turkish firms in sectors and regions more likely to supply foreign affiliates tend to introduce more complex products, where complexity is captured using a measure developed by Hausmann and Hidalgo (2009). This finding is robust to controlling for omitted variables, sample selection and potential simultaneity bias. It is also in line with the view that inflows of foreign direct investment stimulate upgrading of indigenous production capabilities in host countries.
    Keywords: Backward Linkages; FDI; Product Innovation; Production Upgrading; Turkey
    JEL: D22 F23 L20
    Date: 2017–03
  11. By: Rim Berahab
    Abstract: Despite the sustained growth in the bilateral trade observed at the beginning of the Century, Moroccan – Brazilian economic relations are still going through what could be called the ‘shallow’ phase of relations between two middle-income countries.
    Date: 2017–03

This nep-ara issue is ©2017 by Paul Makdissi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.