nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2023‒09‒25
five papers chosen by
Paul Makdissi, Université d’Ottawa

  1. The nexus between domestic investment and economic growth in MENA countries; Does unemployment matter? By Bakari, Sayef
  2. Micro- and Macroeconomic Impacts of a Place-Based Industrial Policy By Enghin Atalay; Ali Hortacsu; Mustafa Runyun; Chad Syverson; Mehmet Fatih Ulu
  3. Extending the Frontiers of Financial Development for Sustainability of the MENA States: The Roles of Resource Abundance and Institutional Quality By Stephen T. Onifade; Bright A. Gyamfi; Ilham Haouas; Simplice A. Asongu
  4. A greener Kuwait: how electric vehicles can lower CO2 emissions By Ottesen, Andri; Banna, Sumayya; Alzougool, Basil; Damrah, Sadeq
  5. Investigating the asymmetric impact of oil prices on GCC stock markets By Nidhaleddine Ben Cheikh; Sami Ben Naceur; Oussama Kanaan; Christophe Rault

  1. By: Bakari, Sayef
    Abstract: In this paper, we try to search the effect of unemployment on the relationship between domestic investment and economic growth. Data for MENA countries over the period 1998 – 2022 are applied for panel data analysis. Empirical analysis validates that domestic investment impact positively on economic growth. However, unemployment has a negative incidence on economic growth. Also, the outcome of domestic investment on economic growth attests to be influenced negatively by unemployment.
    Keywords: Domestic Investment, Economic Growth, unemployment, MENA Countries, Panel Data Analysis
    JEL: E22 E24 G31 O47 O50
    Date: 2023
  2. By: Enghin Atalay; Ali Hortacsu; Mustafa Runyun; Chad Syverson; Mehmet Fatih Ulu
    Abstract: We investigate the impact of a set of place-based subsidies introduced in Turkey in 2012. Using firm-level balance-sheet data along with data on the domestic production network, we first assess the policy’s direct and indirect impacts. We find an increase in economic activity in industry-province pairs that were the focus of the subsidy program, and positive spillovers to the suppliers and customers of subsidized firms. With the aid of a dynamic multi-region, multi-industry general equilibrium model, we then assess the program’s impacts. Based on the calibrated model, we find that, in the long run, the subsidy program is modestly successful in reducing inequality between the relatively underdeveloped and more prosperous portions of the country. These modest longer-term effects are due to the ability of households to migrate in response to the subsidy program and to input-output linkages that traverse subsidy regions within Turkey.
    Keywords: place-based policies; investment; inequality
    JEL: D57 F16 H25 J38 R12
    Date: 2023–06–13
  3. By: Stephen T. Onifade (KTO Karatay University, Konya, Turkey); Bright A. Gyamfi (Ä°stanbul Ticaret University, Turkey); Ilham Haouas (Abu Dhabi, UAE); Simplice A. Asongu (Johannesburg, South Africa)
    Abstract: Resource abundance characterizes economies within the MENA region from North Africa to the Middle East. As such, to improve financial development (FD) for regional economic sustainability, this study provides a comprehensive analysis of the roles of natural resources abundance and institutional quality indicators on the region’s FD while underscoring the inflationary levels and general economic growth trends amidst rising globalization. The adopted empirical strategy (CS-ARDL and AMG) is employed for potential cross-sectional dependency (CD) and slope homogeneity in the regional data spanning over two decades (2000-2020). Unlike the extant literature, two separate regional FD indicators were considered for an insightful analysis namely, banking financial services via domestic credit to private sector, and financial stability via the Z-score values showing the tendencies of default in a country's banking structure. Regardless of the FD indicator, the results reveal that natural resources, growth trends, and inflationary levels significantly spur long-run regional FD thereby invalidating the financial resource curse hypothesis in the region. Furthermore, both institutional quality levels and globalization produced detrimental impacts on FD levels. However, the interaction between institutional quality levels and natural resources shows a desirable FD-stimulating effect in the region, noticeably when FD is proxied by the Z-score. Thus, implying that stronger institutions are crucial for MENA’s overall financial stability vis-Ã -vis reduction in the risk of default in the banking system. Hence, policy recommendations including the strengthening of institutional capacities among others, were suggested to regional authorities towards harnessing resources for sustainable regional FD.
    Keywords: Natural resources, Financial development, Institutions, MENA region, Sustainable growth
    JEL: Q33 P48 E44 O53 O55
    Date: 2023–01
  4. By: Ottesen, Andri; Banna, Sumayya; Alzougool, Basil; Damrah, Sadeq
    Abstract: This paper investigates the early adopter market for electric vehicles (EVs) as preamble for mass adoption of EVs as a tool to help Kuwait lower greenhouse gas (GHG) emissions and meet climate policy standards. From interviews and surveys conducted, we found major trends preventing EVs from mass adoption and conclude with a series of recommendations for the Kuwaiti government that would help EV market in Kuwait to develop their mass market appeal, thus lowering current GHG emissions and fulfil international and national commitments towards sustainability. Open-ended interviews were conducted with all automobile dealers in Kuwait selling EVs as well as with 10 current EV owners, in addition to a quantitative 600-participant survey of mostly 18 to 40-year-old drivers of conventional cars. The survey focuses on whether participants were likely to purchase an EV as their next vehicle and under what circumstances. More than half of the participants indicated they were likely to purchase EVs if there were more fast charging stations readily available, if the price of EVs was comparable to conventional vehicles and if gasoline prices increased relative to electricity. Additionally, they would need to have a battery warranty for the duration of the vehicle. Based on the interviews and surveys, the paper presents ten reasons for the current low rate of EV adoption in Kuwait as well as recommendation for improvements.
    JEL: R14 J01
    Date: 2023–08–01
  5. By: Nidhaleddine Ben Cheikh; Sami Ben Naceur; Oussama Kanaan; Christophe Rault (LEO - Laboratoire d'Économie d'Orleans - UO - Université d'Orléans - UT - Université de Tours)
    Date: 2021–09

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