nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2019‒05‒06
ten papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Morocco Faces its First Commercial Dispute before the WTO By Jamal Machrouh
  2. Are politically connected firms turtles or gazelles? Evidence from the Egyptian uprising By Hany Abdel-Latif; Hassan Aly
  3. Multiple Benefits through Smart Home Energy Management Solutions -- A Simulation-Based Case Study of a Single-Family House in Algeria and Germany By Marc Ringel; Roufaida Laidi; Djamel Djenouri
  4. Returns to Investment in Education: The Case of Turkey By Harry Anthony Patrinos; George Psacharopoulos; Aysit Tansel
  5. Festivals and destination marketing: An application from Izmir City By Pirnar, Ige; Kurtural, Sinem; Tutuncuoglu, Melih
  6. Modeling of Economic and Financial Conditions for Nowcasting and Forecasting Recessions: A Unified Approach By Cem Cakmakli; Hamza Demircan; Sumru Altug
  7. Movements in International Bond Markets: The Role of Oil Prices By Saban Nazlioglu; Rangan Gupta; Elie Bouri
  8. Israel's Struggle Towards Macroeconomic Stability: Historical-Analytical Essay By Razin, Assaf
  9. Winners and Losers in Industrial Policy 2.0: An evaluation of the impacts of the Tunisian Industrial Upgrading Program By Mohamed Ali Marouani; Michelle Marshalian
  10. La microfinance dans la région MENA entre performance financière et performance sociale : étude de cas de 18 IMF By Tlili, Afef

  1. By: Jamal Machrouh
    Abstract: This paper examines Turkey's case against Morocco before the World Trade Organization (WTO), over anti-dumping duties on hot-rolled steel products. Turkey's complaint constitutes both a precedent and an opportunity. First, it is a precedent in that Morocco was previously never involved in a case before GATT or WTO, neither as a plaintiff nor as a defendant. Second, it is an opportunity as the evaluation of the legal process of the complaint enables an assessment of adequacy of Morocco's arguments and, consequently, the elaboration of recommendations and guidelines for the overall legal strategy.
    Date: 2019–02
  2. By: Hany Abdel-Latif (Swansea University); Hassan Aly
    Abstract: Using an original firm-level database and utilizing the incidence of the Egyptian uprising of 2011, this paper provides an empirical investigation of the effects of firms political connections on employment growth in Egypt. Our unique dataset covers 4008 firms between 2004-2016, of which we were able to identify 735 politically connected firms. We set-up a quasi-natural experiment environment to explore how job creation responds to negative shocks to political connections. We use the differences in differences (DiD) framework to compare employment growth in both politically connected firms (PCFs) and their unconnected counterparts before and after the Egyptian uprising. To minimize possible bias in the DiD estimation due to dealing with a heterogeneous group of firms, we apply the propensity score matching (PSM). In addition, we estimate the quantile DiD at different points in the distribution. We find that connected firms before the shock decreased their job creation after the uprising. This implies that employment growth in PCFs has declined after receiving a negative political shock.
    Date: 2019
  3. By: Marc Ringel; Roufaida Laidi; Djamel Djenouri
    Abstract: From both global and local perspectives, there are strong reasons to promote energy efficiency. These reasons have prompted leaders in the European Union (EU) and countries of the Middle East and North Africa (MENA) to adopt policies to move their citizenry toward more efficient energy consumption. Energy efficiency policy is typically framed at the national, or transnational level. Policy makers then aim to incentivize microeconomic actors to align their decisions with macroeconomic policy. We suggest another path towards greater energy efficiency: Highlighting individual benefits at microeconomic level. By simulating lighting, heating and cooling operations in a model single-family home equipped with modest automation, we show that individual actors can be led to pursue energy efficiency out of enlightened self-interest. We apply simple-to-use, easily, scalable impact indicators that can be made available to homeowners and serve as intrinsic economic, environmental and social motivators for pursuing energy efficiency. The indicators reveal tangible homeowner benefits realizable under both the market-based pricing structure for energy in Germany and the state-subsidized pricing structure in Algeria. Benefits accrue under both the continental climate regime of Germany and the Mediterranean regime of Algeria, notably in the case that cooling energy needs are considered. Our findings show that smart home technology provides an attractive path for advancing energy efficiency goals. The indicators we assemble can help policy makers both to promote tangible benefits of energy efficiency to individual homeowners, and to identify those investments of public funds that best support individual pursuit of national and transnational energy goals.
    Date: 2019–04
  4. By: Harry Anthony Patrinos (World Bank); George Psacharopoulos; Aysit Tansel
    Abstract: This paper estimates private and social returns to investment in education in Turkey, using the 2017 Household Labor Force Survey and alternative methodologies. The analysis uses the 1997 education reform of increasing compulsory education by three years as an instrument. This results in a private rate of return on the order of 16 percent for higher education and a social return of 10 percent. Using the number of children younger than age 15 in the household as an exclusion restriction, the analysis finds that returns to education for females are higher than those for males. Contrary to many findings in other countries, private returns to those working in the public sector are higher than those in the private sector, and private returns to those who followed the vocational track in secondary education are higher than those in the general academic track. The paper discusses the policy implications of the findings.
    Date: 2019
  5. By: Pirnar, Ige; Kurtural, Sinem; Tutuncuoglu, Melih
    Abstract: Festivals are among the growing global city and destination attraction factors and they are very trendy. Studies indicate that there is a direct relationship between the successful organizations of festivals and the number of visitors and tourism income of a city destination. Thus, festival marketing efforts usually have a direct impact on city marketing efforts. Due to this fact, the study tries to figure out the festival marketing potential of Izmir city that seems to lag behind the general tourism development pattern of Turkey contrary to the great potential it has. The study comprises of two main sections, first one being a literature review on festival marketing, followed by the second section on a qualitative research on Izmir’s festivals and their marketing potential. It tries to determine the positive impacts of Izmir’s festivals on destination marketing and by grouping and categorizing them under similar characteristics figuring out the most promising ones. The research consists of four open-ended interview questions on festivals held in Izmir city. As practical implications, Destination Management Organizations, Destination Marketing Organizations, destination and city marketers, festival managers and destination tourism developers may benefit from the findings of this study.
    Keywords: Festival marketing; Destination marketing; Izmir; Festivals; City marketing
    JEL: G14 L83 M31 Z10
    Date: 2019–04–15
  6. By: Cem Cakmakli (Koc University); Hamza Demircan (Koc University); Sumru Altug (American University of Beirut, CEPR)
    Abstract: In this paper, we propose a method for jointly estimating indexes of economic and financial conditions by exploiting the intertemporal link between their cyclical behavior. This method combines a dynamic factor model for the joint modeling of economic and financial variables with mixed frequencies together with a tailored Markov regime switching specification for capturing their cyclical behavior. It allows for imperfect synchronization between the cycles in economic and financial conditions/factors by explicitly estimating the phase shifts between their cyclical regimes. We examine the efficacy of the model for predicting cyclical activity in a key emerging economy, namely, Turkey, by making use of a mixed frequency ragged-edge data set. A comparison of our framework with more conventional cases imposing common cyclical dynamics as well as independent cyclical dynamics for the economic and financial indicators reveals that the proposed specification provides precise estimates of indexes of economic and financial activity together with accurate and timely recession probabilities. Recession probabilities estimated using the available data in the first week of November 2018 indicate that Turkey entered a recession that is still ongoing starting from August 2018. We further conduct a recursive real-time exercise of nowcasting and forecasting business cycle turning points. The results show evidence for the superior predictive power of our specification by signaling oncoming recessions (expansions) as early as 3.6 (3.3) months ahead of the actual realization.
    Keywords: Financial conditions index; Coincident economic index; Dynamic factor model; Markov switching; Imperfect synchronization; Bayesian inference.
    JEL: C11 C32 C38 E37
    Date: 2019–04
  7. By: Saban Nazlioglu (Department of International Trade and Finance, Faculty of Economics and Administrative Sciences, Pamukkale University, Denizli, Turkey); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Jounieh, Lebanon)
    Abstract: In this paper, we analyze daily data-based price transmission and volatility spillovers between crude oil and bond markets of major oil exporters and importers, by accounting for structural shifts as a smooth process in causality and volatility spillover estimations. In general, we find that, oil prices tend to predict bond prices in majority of oil exporting countries, and for the two major oil importers of India and China. But, the feedback from bond to oil prices is weak, and is detected for China and USA. Regarding volatility spillovers, oil volatility affects the bond market volatility of some major oil exporters (Kuwait, Norway and Russia), and an importer (France). However, the most prominent volatility spillovers are from bond to oil, except for Kuwait and Saudi Arabia. We also reveal that taking into account for smooth structural shifts - accounting for structural breaks - strengthens our findings and particularly is important for volatility spillover analysis. Our results have important implications for academics, investors, and policy makers.
    Keywords: Bond and oil markets, price and volatility spillovers, major oil exporters and importers, structural changes
    JEL: C32 G12 Q02
    Date: 2019–04
  8. By: Razin, Assaf
    Abstract: This essay offers an economic-history perspective of the long struggle towards macroeconomic stability. The paper is a broad analytical overview of major exogenous shocks and shifts in macroeconomic policy and institutions in Israel since the 1977-1985 great inflation through the global financial crisis and the effects of those shifts on long term growth, inflation, the business cycle, the Phillips curve and related economic developments. The paper will discuss three main issues. The first one on the inflation crisis focuses on the 1985 stabilization and on its impact on subsequent reform of monetary institutions. The second discusses the impact of globalization on growth, inflation and the Phillips curve. The third contains a discussion of the reasons for the relatively good performance of Israel during the crisis, including foreign exchange market intervention.
    JEL: E0 F0
    Date: 2019–04
  9. By: Mohamed Ali Marouani (Université Paris 1 Panthéon-Sorbonne); Michelle Marshalian
    Abstract: Large scale business subsidies tied to national industrial development promotion pro-grams are notoriously difficult to study and inseparable from the political economy aspect of large government programs. The Tunisian Industrial Upgrading Program, initiated in the late 80’s, to improve the competitiveness of Tunisian firms increasingly exposed to international competition through firm subsidies, is such an example. The continuation and resurgence of industrial devlopment programs, such as the Tunisian IUP, makes the rigorous evaluation of this type of program within the political economy framework, increasingly important. We use the Tunisian national firm registry database and a perceptions’ survey administered by the national research institute to measure the impact of the IUP and its beneficiaries. Using inverse propensity score re-weighted differences-in-differences regressions, we find that when program recipients are large firms, gains of the program are mostly retained by capital-owners, while when subsidies are distributed to small-sized firms, more gains go to labor.
    Date: 2019
  10. By: Tlili, Afef
    Abstract: This paper is about analyzing the performance of MFIs. Our study focuses on Arab MFIs in the MENA region. We chose 18 MFIs from 7 Arab countries in the MENA region namely : Tunisia ; Morocco ; Egypt ; Palestine ; Jordan ; Lebanon and Yemen. Our goal is to answer the following questions : Are Arab MFIs in the MENA region performing well ? What is the orientation of these institutions ? To answer these questions we followed a methodology that brings together two parties. The first step involves using the DEA method to evaluate the performance of the MFIs in our sample. The second step is to apply the PCA (principal component analysis) on the efficiency scores obtained from the DEA method, in order to determine the orientation of each entity examined.
    Keywords: microfinance, financial performance, social performance.
    JEL: G21 P27 P31
    Date: 2019–04–30

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