nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2021‒12‒20
eight papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Saudi Non-oil Exports Before and After COVID-19: Historical Impacts of Determinants and Scenario Analysis By Fakhri Hasanov; Fred Joutz; Muhammad Javid
  2. The Socioeconomic Determinants of Urban Poverty in Saudi Arabia By Al Lily, Miriam; Waibel, Hermann
  3. Financial constraints and productivity growth: firm-level evidence from a large emerging economy By Yusuf Kenan Bagir; Unal Seven
  4. Corporate Indebtedness and Investment: Micro Evidence of an Inverted U-Shape By Ibrahim Yarba
  5. Moroccan industry in the covid-19 era : the case of the automotive sector By Sara Labrar; Abdelouahab Maarouf; Lahboub Zouiri
  6. Price transmission along the Turkish poultry and beef supply chains By Mehmet Guncavdi; Murat Kors; Elif Ozcan Tok
  7. Algeria: 2021 Article IV Consultation-Press Release; and Staff Report; and Statement by the Executive Director for Algeria By International Monetary Fund
  8. Qualité du système d’information de l’administration fiscale, e-administration fiscale et stabilité de la dette publique au Maroc By Mohammed Eddaou; Mohammed Hafiane

  1. By: Fakhri Hasanov; Fred Joutz; Muhammad Javid (King Abdullah Petroleum Studies and Research Center)
    Abstract: This study aims to investigate the determinants of short- and long-run investment behavior in Saudi Arabia for eight non-oil sectors. Saudi Arabia is currently proceeding with its historic Vision 2030 reform plan, which aims to significantly increase the private sector’s contribution to the country’s gross domestic product. Thus, analyzing investments at the sectoral level is important for Saudi Arabia. Such an analysis can provide policymakers with a deeper understanding of potential opportunities for boosting private sector growth.
    Keywords: General equillibrium models, Hybrid model
    Date: 2021–08–24
  2. By: Al Lily, Miriam; Waibel, Hermann
    Abstract: This paper presents results from one of the first independent socioeconomic household surveys to study urban poverty among Saudi nationals. This survey was administered to 496 Saudi households in Dammam in 2019. Poverty is conceptualised as relative poverty, which is based on the country’s inflation adjusted national poverty line of $6 per person per day. The methodology is based on the Foster-Greer-Thorbecke (FGT) poverty index, which is used to analyse the socioeconomic determinants of the prevalence, intensity, and severity of poverty. The results indicate that education and unemployment are crucial determinants of poverty outcomes. In addition, large family sizes combined with the tradition of having a single breadwinner also pushes households into poverty. Female-headed households are particularly vulnerable. Furthermore, social capital positively impacts the welfare of households, whereas being of African descent has a negative influence. However, health, personal attitudes, and being of Bedouin origin are not significant variables in the model. The social welfare system is able to mitigate some of the disadvantages, but not all. Overall, approximately one third of poor households are being lifted out of poverty by social welfare payments.
    Keywords: Arab World; Social Exclusion; Urban Poverty; Poverty Determinants; Poverty Gap
    JEL: O12 I32
    Date: 2021–12
  3. By: Yusuf Kenan Bagir; Unal Seven
    Abstract: We study whether the linkage between financing and productivity growth strengthens as the severity of financial constraints increases by using firm-level administrative data from a large emerging economy. We also explore whether upstream firms’ financial constraints play a role in the linkage between finance and productivity. Using a combination of administrative databases of tax registry and firm-to-firm trade data of 896,317 Turkish firms from 2007 to 2018, employing various robustness tests and controlling for reverse causality, we find strong evidence that firms facing higher financial constraints exhibit a higher sensitivity of total factor productivity (TFP) growth to debt growth. Moreover, we show that a rise in upstream firms’ financial constraint level also leads to increased sensitivity of TFP growth to debt growth. Our results reveal important channels through which financial constraints could hinder productivity growth in Turkey.
    Keywords: TFP growth, Financial constraints, Debt growth
    JEL: D24 G30 O16
    Date: 2021
  4. By: Ibrahim Yarba
    Abstract: This study investigates the link between corporate indebtedness and investment by utilizing a novel firm-level data, which contains the universe of all incorporated manufacturing firms in Turkey over the last decade. The results of the panel regression model with multi-dimensional fixed effects provide significant evidence of an inverted-U relationship between indebtedness and investment, indicating that leverage increases investment up to a certain level, and after that further increase in leverage has an adverse impact on investment. This non-monotonic relationship is evident for all firm size groups. Conspicuously, the indebtedness level that becomes an impediment to investment is significantly lower for SMEs than large firms, which is in support of the arguments that small firms are more likely to be affected by debt overhang. Results also reveal that firms holding more cash can sustain higher level of debts without hurting investment activity. This is also the case for high capital-intensive firms and exporters. Findings of this paper highlight the importance of policies to make equity financing more attractive, incentivise the uptake and provision of equity capital from private investors, and deepen the capital markets.
    Keywords: Corporate debt, Firm investment; Cash policy; SMEs, Debt overhang
    JEL: C23 D22 E22 G31 G32
    Date: 2021
  5. By: Sara Labrar (Université Mohammed V de Rabat [Agdal]); Abdelouahab Maarouf (Université Mohammed V de Rabat [Agdal]); Lahboub Zouiri (Université Mohammed V de Rabat [Agdal])
    Abstract: The impact of the Covid-19 pandemic continues to destabilize Moroccan industry. Indeed, all branches of the industrial sector are affected. The world situation requires all countries to struggle to preserve both the health of their citizens and the viability of the economic system. The automotive sector, one of the pillars of the economy, is confronted with shocks at all levels of its industrial chain. This paper aims to contextualize the economic impact of the COVID-19 pandemic on Morocco's industrial sectors and to identify the implications of this crisis for the automotive sector ; any decline in its activity will have a strong impact on the balance of trade. Second, given the high level of uncertainty around the pandemic and the unique character of the current crisis, the forecast and simulation exercise seems very important to understand the repercussions of this crisis on the economic aggregates of the automotive sector.
    Abstract: L'impact de l'épidémie de Covid-19 continue de déstabiliser l'industrie marocaine. En effet, toutes les branches du secteur industriel sont pleinement secouées et désorientées. Le constat est planétaire et tous les pays sont entrés dans une course contre la montre, pour préserver à la fois la santé des citoyens et la viabilité du système économique. Le secteur automobile, un des secteurs clé de l'économie, a souffert de l'arrêt de la production, de la perturbation des chaines d'approvisionnement et de la baisse brutale de la demande extérieure, due à la crise économique mondiale. L'objectif de ce papier vise à contextualiser l'impact économique de la pandémie du COVID-19 à l'échelle des secteurs industriels au Maroc et cerner au mieux les ramifications de cette crise au niveau du secteur automobile en tant que premier secteur exportateur du pays ; toute baisse de son activité aura un fort impact sur la balance commerciale et le compte courant de manière générale, devraient subir un choc majeur et faire face à une perte conséquente des recettes à l'exportation. Ensuite, compte tenu du niveau élevé d'incertitude liée à la pandémie et du caractère idiosyncratique de la crise actuelle, l'exercice de prévision et de simulation nous parait extrêmement important pour comprendre les répercussions de cette crise sur les agrégats économiques du secteur automobile.
    Keywords: Covid-19,industrie marocaine,secteur automobile,prévision
    Date: 2021–09–30
  6. By: Mehmet Guncavdi; Murat Kors; Elif Ozcan Tok
    Abstract: In this study, we examine the price transmission in terms of magnitude and speed along the supply chains of Turkish poultry and beef markets. We develop a two-step model. In the first step, we employ indicator saturation method to identify the structural breaks of impulse-indicator saturation (IIS), step-indicator saturation (SIS) and trend-indicator saturation (TIS) types in the data. In the second step, we construct an autoregressive distributed lag-error correction model (ARDL-ECM) introducing the structural breaks into the analysis. The main findings indicate that the magnitudes of pass through of a price shock between different levels of supply chains are considerably large, and the largest effect is observed from wholesale prices to retail prices. The convergence to the long run equilibrium is also fast.
    Keywords: Conditional ECM, Food supply chain, Vertical price transmission
    JEL: E31 E37 Q11 Q18
    Date: 2021
  7. By: International Monetary Fund
    Abstract: The concomitant Covid-19 pandemic and oil price shock in 2020 have taken a heavy toll on the Algerian economy and the population. The authorities’ response helped mitigate the social and economic impact of the crisis. Nevertheless, the crisis exacerbated the Algerian economy’s vulnerabilities, making even more urgent the need for a new, more inclusive and sustainable, growth model. A recovery is underway in 2021, but the outlook remains challenging. While the recent rebound in hydrocarbon prices should buoy the recovery and ease immediate financing constraints, addressing long-standing structural challenges will help to realize Algeria’s vast growth potential for the benefit of its population.
    Date: 2021–12–02
  8. By: Mohammed Eddaou (Université Mohammed Premier, Oujda - Faculté des sciences juridiques, économiques et sociales); Mohammed Hafiane
    Abstract: In Morocco, the period from 2003 to 2020 has been marked by an inability of fiscal policy to permanently cover debt services with a primary surplus. However, there was a potential for this to be achieved in 2007 and 2008 and 2010, and a trend towards its achievement from 2015 to date. What is the relationship between the quality of the tax administration's information system and the stability of public debt in Morocco? In order to shed theoretical light on our main question, we have opted for scientific realism as an epistemological position, and the hypothetico-deductive approach as a research approach. To study our research hypotheses, we constructed a time series data sample from 2013 to 2020. In order to succeed in the empirical analysis of our conceptual research model, and with the existence of endogenous variables in the modeling of structural equations, we are obliged to pass by an empirical analysis of the data by using simultaneous equations. The results of the study show that the stability of public debt in Morocco is a stability related to the E-tax administration and the development of the quality of the information system of the tax administration.
    Abstract: Au Maroc, la période allant de 2003 à 2020 s'est marquée par une incapacité de la politique budgétaire à assurer d'une manière permanente la couverture des services de la dette par un excédent primaire. Cependant, un potentiel de sa réalisation s'est manifesté durant les années 2007 et 2008 et 2010, ainsi qu'il y avait une tendance à sa réalisation depuis 2015 à ce jour. Quelles relations entre la qualité du système d'information de l'administration fiscale et la stabilité de la dette publique au Maroc ? Pour apporter un éclairage théorique à notre question principale, nous avons opté pour le réalisme scientifique en tant que positionnement épistémologique, et la démarche hypothético-déductive en tant que démarche de recherche. Pour étudier nos hypothèses de recherche, nous avons construit un échantillon de données en série temporelle de 2013 à 2020. Pour réussir l'analyse empirique de notre modèle conceptuel de recherche, et avec l'existence de variables endogènes dans la modélisation des équations structurelles, nous sommes obligés de passer par une analyse empirique des données en utilisant les équations simultanées. Les résultats de l'étude montrent que la stabilité de la dette publique au Maroc est une stabilité liée à l'E-Administration fiscale et au développement de la qualité du système d'information de l'administration fiscale.
    Keywords: stability of the public debt,tax e-administration,information system,technical progress,Innovation
    Date: 2021–10–26

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