Effects of pro-growth policies on employment: evidence of regional disparities

The main objective of our research is to study the direct impact of pro-growth economic policies on employment creation globally and regionally, as evidence has countered policy-makers’ expectation that output growth leads automatically to job creation. We innovate by using the ratio of employment to the population above 25 years as dependent variable instead of the customary employment elasticity. We apply generalized methods of moments’ econometrics on dynamic panel data models and find that growth stimulates employment creation on average across 76 countries. The policies promoting private sector credit, investments, openness, services, education spending, tertiary enrollment, and a fixed exchange rate are the ones that create employment. Larger government size undermines job creation, while policies promoting FDI and industrial development fail to stimulate employment. However, we establish that the effect of pro-growth policies on employment varies significantly across regions, with evidence of weaker links between economic policies and employment in Sub-Saharan Africa and the Middle East.     

Consideration of technological and environmental heterogeneity in cost efficiency analysis

In order to evaluate and compare the efficiency levels across banking industries, we adopt the meta-frontier model that can assess the technological difference among countries. Given the importance of country specific conditions, we include in our analysis the different specificities of each country to incorporate the technological as the environmental differences in the evaluation of banking efficiencies. Using data on the banking industries of several countries in the MENA region, over the period 1991–2011, the results of the efficiency scores corrected by the technological and environmental gap led us to conclude that Egyptian banks are the most efficient in terms of cost compared with banks in other countries. Egyptian banks enjoy a very favourable banking technology. Our results support the hypothesis that traditional techniques of efficiency analysis based on the efficiency scores of a specific and pooled frontier tend to mystify efficiency levels and may incorrectly identify efficient banks. This paper contributes to the efficiency literature by incorporating technological and environmental heterogeneities in the evaluation of efficiency. This helps to characterize the production process of a bank and provides common standards by which the efficiencies of banks in different countries can be compared in a meaningful way with each other.     

The Impact of Liquidity on Debt Maturity After a Financial Crisis: Evidence from the Gulf Cooperation Council Region

This article contributes to the existent literature on corporate debt maturity by studying a new channel through which firms may mitigate the effects of a major economic downturn such as the 2008 global financial crisis. More specifically, using a sample of 208 listed firms in the Gulf Cooperation Council (GCC) region, we find that an increase in firms’ current ratios after the crisis is associated with an increase in long-term financing. We also find that a financially constrained firm can still access long-term financing if its current ratio after the crisis is beyond a specific threshold. Additionally, we highlight the differences in the typical drivers of debt structure between GCC countries and industries.     

Financial development,ICT diffusion and economic growth: Lessons from MENA region

This paper aims to test jointly two economic puzzles: the effect of financial development and Information and Communication Technology (ICT) on economic growth. Theories predict a positive effect of financial development and ICT on growth but empirical studies on these relationships produced mixed results. Further, we investigate the interaction between financial development and ICT Diffusion to test whether the impact of financial development on growth is strengthened by better ICT infrastructure. In this paper we assess empirically these relationships in some MENA countries. The empirical study is based on estimation of a dynamic panel model with system GMM estimators. There are three main findings. First, our empirical results join empirical literature that find a negative direct effect of financial development on economic growth. This ambiguous relationship may be linked to many phenomenons but there are not yet clear explanations of this puzzle. Second, the estimates reveal a positive and significant direct effect of ICT proxies on economic growth. This implies that MENA countries need to reinforce their ICT policies and improve using of new Information and Communication Technology. Finally, the interaction between ICT penetration and financial development is found positive and significant in the growth regression. This implies that economies in Mena region can benefit from financial development only once a threshold of ICT development is reached.     

Conventional and Islamic Banks’ Performance in the Gulf Cooperation Council Countries; Efficiency and Determinants

This paper investigates the cost efficiency levels of the banking sectors of the Gulf Cooperation Council (GCC) countries for the period from 2001 to 2015 and provides a comparison of conventional and Islamic banks. We obtain measures of efficiency using a stochastic frontier model and the meta-frontier approach. The evidence demonstrates that Islamic banks are less efficient and have a weaker level of production technology than conventional banks. The cost efficiency of banks varies significantly across the six Gulf countries and over time. We adopt the results drawn from the meta-frontier model that allow to take into account the differences between the studied countries, and empirically examine the bank-specific, financial, macroeconomic, and political determinants of banking efficiency. The results provide evidence of the differential effects of the selected variables on the efficiency of conventional and Islamic banks. These variables affect the performance of the two types of banks in different ways and with different magnitudes.

     

How Can Globalization Affect Income Distribution? Evidence from Developing Countries

ABSTRACT

The standard Hecksher-Ohlin-Samuelson framework claimed that foreign trade benefits developing countries, but many empirical studies suggest otherwise. After analyzing data on income deciles from the World Income Distribution Database for 66 developing countries, we found that trade openness benefits underprivileged people in affluent countries but not in developing countries. Also, external financial flows and democracy in conjunction do not exert significant effects, suggesting that these variables might affect income distribution through different channels. Finally, we reinforce the Kuznets inverted-U hypothesis; namely, the presence of an economic development threshold beyond which low-income deciles would increase.     

Benchmarking Banking Efficiency Using a Meta-Profit Function

Journal of Quantitative Economics - This paper applies the meta-frontier approach to investigate the profit efficiency level of the banking sector in the MENA region. This approach enables the...