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Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

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Abstract

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Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

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Article
Publication date: 30 September 2020

Mina Sami and Wael Abdallah

This paper examines the impact of cryptocurrency market on the stock market performance in Middle East and North Africa (MENA) region. A comparative analysis is extended…

Abstract

Purpose

This paper examines the impact of cryptocurrency market on the stock market performance in Middle East and North Africa (MENA) region. A comparative analysis is extended to distinguish this impact between Gulf countries and other economies in the region.

Design/methodology/approach

The analysis uses the information of cryptocurrencies and the stock market indices of the Gulf countries for the period 2014–2018 on a daily basis. Two strategies have been implemented to fulfill the goal of the study: first, the tests strategy, which is applied using the cointegration analysis and panel-specific forms of Granger causality; second, the regression strategy, which is applied mainly using the instrument variable with generalized method of moments (IV-GMM) method.

Findings

The results show that there is a significant relationship between the cryptocurrency market and the stock market performance in the MENA region. On the one hand, for the Gulf countries that claim full obedience to the Islamic Sharia rules, each 1% increase in the cryptocurrency returns reduces the stock market performance by 0.15%. On the other hand, for the non-Gulf (other MENA) countries that have flexibility in applying the Islamic Sharia rules or do not follow it, the stock market performance increases by 0.13%, for each 1% increase in the cryptocurrency returns.

Originality/value

The paper proposes two main contributions: First, the paper introduces the cryptocurrency returns as one of the determinants of the stock market performance in the MENA region. This impact is distinguished based on the degree of applying the Islamic Sharia rules and the vision of the government to the stock market. Second, the paper provides an empirical guideline for governments in the MENA region for efficient measures in their stock market, given the important expansion of the cryptocurrency market and the government type.

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Journal of Economic and Administrative Sciences, vol. 37 no. 4
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 22 July 2020

Duha Farouq Khmous and Mustafa Besim

This study aims to investigate how the Islamic banking share (percentage of total Islamic banking assets relative to total banking sector assets) and individual…

Abstract

Purpose

This study aims to investigate how the Islamic banking share (percentage of total Islamic banking assets relative to total banking sector assets) and individual characteristics (gender, age, income and education) affect financial inclusion in 14 Middle Eastern and North African (MENA) countries with different income levels.

Design/methodology/approach

This study uses data from the 2014 World Bank Global Findex database to analyze the impact of individual characteristics, Islamic banking share and countries’ developmental levels on financial inclusion and its barriers in MENA countries. The probit estimation method is used for estimations.

Findings

The findings indicate that financial inclusion, particularly in middle-income MENA countries, is lower than the global average. While being male, rich and older positively affects financial inclusion in these countries, education does not. Islamic banking practises also contribute to financial inclusion, especially for individuals with strong religious affiliations. The effect of Islamic banking on financial inclusion is found to be greater in middle-income MENA countries.

Practical implications

Islamic banking institutions could play a greater role in promoting financial inclusion in the MENA region by offering Sharia-compliant products that meet individuals’ needs, matching the specific requirements and status of each country with affordable costs and offering adequate information to customers. Governments should promote more Islamic banking and incentivise investments in technology, which helps expand financial inclusion.

Originality/value

This is the first study to examine the influence of Islamic banking share and countries’ levels of development on financial inclusion in the MENA region.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 13 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Content available
Article
Publication date: 19 June 2019

Noha Sami Omar

Innovation has become the engine of economic growth, especially with the Fourth Industrial Revolution. This paper aims at studying the association between innovation …

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2114

Abstract

Purpose

Innovation has become the engine of economic growth, especially with the Fourth Industrial Revolution. This paper aims at studying the association between innovation – measured by gross expenditure on research and development (GERD) – and economic performance – represented by real gross domestic product (GDP) – in MENA region over the period 1996-2016.

Design/methodology/approach

The paper uses the panel corrected standard error method to account for heteroskedacity and possible contemporaneous correlation across panels, and the first order autocorrelation within panel for unbalanced datasets.

Findings

The study concludes that R&D expenditure is positive and statistically significant in explaining GDP, but their relationship is weak. Specifically, a 10 per cent increase in R&D expenditure raises GDP by 4 per cent. In addition, human capital, labor force and fixed capital accumulation are found positive and statistically significant. These findings highlight on the importance of innovation and education on fostering economic growth, urging MENA governments to further invest in R&D and innovation sector.

Originality/value

To the best of the author’s knowledge, this paper is the first to investigate the relationship between GERD and GDP in MENA region within the endogenous-growth model framework.

Details

Review of Economics and Political Science, vol. 4 no. 2
Type: Research Article
ISSN: 2356-9980

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Article
Publication date: 6 February 2017

Rania S. Miniesy and Eman Elish

This paper aims to investigate the host country determinants of Chinese Outward FDI (OFDI) and, given these determinants, examines whether Chinese OFDI in MENA is less…

Abstract

Purpose

This paper aims to investigate the host country determinants of Chinese Outward FDI (OFDI) and, given these determinants, examines whether Chinese OFDI in MENA is less than elsewhere.

Design/methodology/approach

Data for the top 40 Chinese OFDI recipients including seven MENA countries from 2003 to 2012 were obtained. A pooled ordinary least squares estimation technique on the lagged explanatory variables and the lagged dependent variable – flows and stocks alternatively – with robust standard errors was used.

Findings

Chinese OFDI is market, resource and efficiency seeking and is attracted by poor governance. The seven MENA countries seemingly receive significantly less Chinese OFDI flows compared to other countries. However, careful inspection shows that UAE is creating this bias. This maybe because exporting to UAE rather than licensing or FDI seems like the best scenario, or UAE is already satiated with FDI from other countries, or China is waiting for the right time to enter such an FDI-competitive market like that of UAE.

Originality/value

Chinese OFDI is particularly important for MENA because it has a comparative advantage relative to other FDI source countries, and no research so far has investigated if it is less than in other regions, which could provide insights on how to attract it.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 10 no. 1
Type: Research Article
ISSN: 1754-4408

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Abstract

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Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

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Article
Publication date: 3 February 2020

Anna Dimitrova, Tim Rogmans and Dora Triki

This paper aims to synthesize, analyze and categorize the empirical literature on country-specific factors that affect foreign direct investment (FDI) inflows to the…

Abstract

Purpose

This paper aims to synthesize, analyze and categorize the empirical literature on country-specific factors that affect foreign direct investment (FDI) inflows to the Middle East and North Africa (MENA) region. Identifying gaps and methodological challenges in the reviewed articles, recommendations are made to guide future research.

Design/methodology/approach

Applying the systematic review methodology, content analysis is conducted of 42 relevant empirical studies that explore country-specific FDI determinants in the MENA region during the period 1998–2018.

Findings

This review study identifies four main research gaps in the extant literature: a lack of consensus on a common definition of the MENA region and a weak understanding of the specificities of its investment environment; a limited set of FDI theories used and a lack of other theoretical perspectives; a recurrent focus on the direct relationship between host country–specific determinants and FDI, thus ignoring the moderating and mediating effects of some variables; and the absence of certain country-specific factors pertaining to the MENA countries.

Originality/value

This study contributes to the international business field by enhancing our understanding of the FDI determinants in emerging and developing markets, especially the MENA countries. It develops a typology of FDI country-specific factors in the MENA region based on four main categories: macroeconomic and financial, institutional and regulatory, natural resource endowment and socio-cultural. Paths for future research are suggested.

Details

Multinational Business Review, vol. 28 no. 1
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 17 July 2017

Abdelaziz Hakimi and Helmi Hamdi

The purpose of this paper is to analyze the effects of corruption on investment and growth in 15 Middle East and North African (MENA) countries during the period…

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1948

Abstract

Purpose

The purpose of this paper is to analyze the effects of corruption on investment and growth in 15 Middle East and North African (MENA) countries during the period 1985-2013. The authors used the International Country Risk Guide (ICRG) corruption index and conducted a panel cointegration analysis and Granger causality procedure to detect the dynamic relationships between the variables. Results indicate that corruption is a serious hurdle to economic growth in MENA countries since it affects investment activities and foreign direct investment inflows. In this case, policymakers have to implement effective anti-corruption strategies to avoid the epidemic of corruption.

Design/methodology/approach

The authors used the ICRG corruption index and conducted a panel cointegration analysis and Granger causality procedure to detect the dynamic relationships between the variables.

Findings

The main findings of this paper show that corruption is a serious hurdle to economic growth in MENA countries since it affects investment activities and foreign direct investment inflows. In this case, policymakers have to implement effective anti-corruption strategies to avoid the epidemic of corruption.

Research limitations/implications

Unfortunately, in this study the authors did not use institutional variables to see their role and to judge whether governments should enhance the quality of institution and improve the corporate governance. This would be an opportunity to expand the sample and to conduct a new research in the near future to assess the real costs of corruption in the MENA region.

Practical implications

Governments and policymakers need to apprehend and admit that corruption is an important issue that deters foreign direct investment and threats the economic development and growth. Corruption can also deteriorate the infrastructure and increase the cost of doing business for both government and private sector which in turn will lower the growth (Tanzi and Doovi, 1997). It is worth recalling that during the past five years, a large part of the MENA region has witnessed multiple social upheavals. Hence, corruption must be tackled effectively and coherently to avoid further social tensions. It is the proper time to take serious steps and strict policy actions within a zero-tolerance framework to fight corruption and its widespread. New rules, laws, and anti-corruption procedures are among the most important initiatives that governments should implement. The governments should also increase the public awareness of the multiple drawbacks of corruption by publishing official reports and data on the most corrupted sector in the country. In this case, media will have a key role to diffuse the necessary information.

Originality/value

While most of the previous studies have employed GMM and OLS techniques, the authors opt a panel vector error correction model and cointegration technique to detect causality between the variables used in the model for the present study.

Details

International Journal of Emerging Markets, vol. 12 no. 3
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 27 July 2018

Pran Krishansing Boolaky, Kamil Omoteso, Masud Usman Ibrahim and Ismail Adelopo

The purpose of this paper is to examine the level of accounting development and the adoption of IFRS in the four foremost economies in the Middle East and North Africa …

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1022

Abstract

Purpose

The purpose of this paper is to examine the level of accounting development and the adoption of IFRS in the four foremost economies in the Middle East and North Africa (MENA)—Egypt, Jordan, Libya and UAE. Through the lens of institutional theory, the study investigates the impact of economic, political, legal and cultural institutions on the development of these countries’ accounting practices and their readiness to use IFRS.

Design/methodology/approach

This research uses accounting development indices obtained from current literature as well as recent World Economic Forum and UNCTAD reports to examine the development of accounting in these MENA countries and their inclination to adopt IFRS.

Findings

The study identifies a number of impediments to the development of accounting practices and adoption of IFRS in these countries. It also reveals that three of the four MENA countries (Egypt, Jordan and UAE) could be placed on a level playing field with their principal trading partners (the US, the UK, Germany and Italy) given the formers’ business environments, methods of raising finance and levels of professional accounting practices.

Research Implications/limitations

Although limited to only four jurisdictions, findings from the study have important implications for investors and parties that are interested in improving the value relevance of the information presented by firms especially in a globalised economy with increasing cross-listing.

Originality/value

This study extends the frontier of knowledge on the development of accounting and IFRS adoption by focusing on the MENA region. It is the first effort that the authors are aware of to adopt such a multifarious approach.

Details

Journal of Accounting in Emerging Economies, vol. 8 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

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