nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2019‒10‒14
five papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Private Sector Job Creation in MENA: Prioritizing the Reform Agenda By Benedicte Baduel; Carolin Geginat; Gaelle Pierre
  2. Facts on Business Dynamism in Turkey By Akcigit, Ufuk; Akgunduz, Yusuf Emre; Cilasun, Seyit Mumin; Ozcan Tok, Elif; Yilmaz, Fatih
  3. Determinants of demand for higher education in palestine, the case of gaza strip 1994-2017 By Abugamea, Gaber
  4. SME Financial Inclusion for Sustained Growth in the Middle East and Central Asia By Mishel Ghassibe; Maximiliano Appendino; Samir Elsadek Mahmoudi
  5. Why is Labor Productivity in Israel so Low? By Hazan, Moshe; Tsur, Shay

  1. By: Benedicte Baduel; Carolin Geginat; Gaelle Pierre
    Abstract: This paper examines the extent to which firms in selected MENA countries reported being constrained by the business environment around the time of the Arab Spring and the extent to which these constraints affected their employment performance. The results suggest that small firms in MENA faced more structural constraints than similar firms in other regions. We also find that MENA firms’ weaker job creation can be explained in great part by the macroeconomic environment and structural constraints. Low GDP growth, falling external competitiveness, corruption, lack of access to finance and poor access to electricity are found to explain a significant part of the lack of employment growth in MENA firms compared to their peers.
    Date: 2019–09–27
  2. By: Akcigit, Ufuk; Akgunduz, Yusuf Emre; Cilasun, Seyit Mumin; Ozcan Tok, Elif; Yilmaz, Fatih
    Abstract: In this paper, we investigate various trends on competition and business dynamism in the Turkish manufacturing sector. More specifically, using micro level administrative data sets of firm balance sheets, credit registry and social security records, we focus on moments such as firm entry, exit, profitability, worker reallocation, labor share, labor productivity and credit distributions, among several others. Our results indicate that business dynamism in the Turkish manufacturing sector was relatively stable and even improving until 2012 but has been declining since then. We find that market concentration and exit rates have started to rise, yet new business creation, labor share of output and economic activities of young firms have declined. Using a model with endogenous market competition, we show that a adverse shock to cost of R&D investment can explain these empirical trends. We identify increases in financing costs after 2012 of followers as a potential mechanism for our findings in Turkey. We next perform a policy analysis with our model which suggests that providing support (e.g., R&D subsidy) to immediate followers can undo the adverse effects of the negative shock to financing costs and therefore foster competition and faster growth.
    Keywords: business dynamism; Competition; Market concentration; Turkish economy
    JEL: E22 E25 L12 O31 O33 O34
    Date: 2019–09
  3. By: Abugamea, Gaber
    Abstract: Since the early 1990s, the demand for higher education has been growing steadily in Palestine, including the case of the Gaza Strip. This paper formulates a model of demand for higher education in the Gaza Strip considering a wide range of demographic, social, academic, economic and institutional explanatory variables. It employs OLS procedures on aggregate enrolment data. The estimation results showed that demographic and social variables explain about 82 percent of the variation of demand for higher education. Also, demographic and social variables affected the number of newly enrolled students in higher education significantly with a positive sign. Further, demand for higher education reacted positively to academic variable represented by success percent in high secondary certificate, economic variables of gdp per capita and unemployment rate and to institutional variables represented by reform in secondary general test, which gives students other chances to pass Tawjihi. Thus we believe that these results have important implication for the conduct of national education policy.
    Keywords: Demand for higher education, Determinants of students participation, Palestine-Gaza Strip
    JEL: I23
    Date: 2019–09–06
  4. By: Mishel Ghassibe; Maximiliano Appendino; Samir Elsadek Mahmoudi
    Abstract: This paper offers empirical evidence that greater financial inclusion of small and medium enterprises (SMEs) can promote higher economic growth and employment, especially in the Middle East and Central Asia regions. First, we show that countries with higher SME financial inclusion exhibit more effective monetary policy transmission and tax collection. Second, we find substantial employment and labor productivity growth gains at the firm level from access to credit, gains that are higher for SMEs. We also obtain evidence of a substantial positive impact on SME employment and labor productivity growth from improved credit bureau coverage and insolvency regimes. Finally, cross-country aggregate evidence confirms the employment and growth gains from SME financial inclusion, which appear larger in the Middle East and Central Asia than in other regions.
    Date: 2019–09–27
  5. By: Hazan, Moshe; Tsur, Shay
    Abstract: We analyze differences in labor productivity between Israel and a group of small OECD countries. We assume a more general human capital production function and calibrate it using PIAAC surveys, which examine the literacy and numeracy skills of the adult population in the OECD countries. Whereas Israel has more years of schooling, its population has lower measured skills. Using development accounting exercise, we show that once years of schooling and numeracy skills are taken into account, differences in accumulated factors explain more than three-quarters of the gap. This is against a split of 60-40 between accumulated factors and total factor productivity, when these skills are ignored. Additionally, using panel data on 13 OECD countries we show strong positive correlation between physical and human capital per worker at the industry level. A causal interpretation of our estimates implies that closing the gap in skills will indirectly close 18 percent of the gap in physical capital.
    Keywords: Development accounting; Human Capital; labor productivity; Physical Capital; PIAAC
    Date: 2019–09

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