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Institutions and development in MENA region: evidence from the manufacturing sector

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  • Mahmoud Arayssi
  • Ali Fakih

Abstract

Purpose - – The purpose of this paper is to study the role of institutions (including civil law origin), financial deepening and degree of regime authority on growth rates in the Middle East and North Africa region. Design/methodology/approach - – This paper examines the implications of industrial firm-related and national factors for the determinants of economic growth using panel data through a fixed effect model. Findings - – The results reveal that English civil law origin and the establishment of the rule of law work with the development of financial institutions to increase economic growth in these economies; however, the democratization of the political institutions and foreign direct investment do not assist financial development in promoting economic growth. Research limitations/implications - – Data covered is limited to four years. Social implications - – The findings emphasize the prominence of overcoming institutional weaknesses and establishing transparent public policy governing businesses as a pre-requisite for successful universal integration in developing countries. Originality/value - – This paper contributes to the literature on the relationship between finance and economic growth in two aspects. First, the authors focus on the contribution of the institutional setting and its interaction with the financial development and how this affects economic growth of the manufacturing firms. Second, the authors explore the relationship between the role of institutions, governance, the country civil law origin and the economic growth.

Suggested Citation

  • Mahmoud Arayssi & Ali Fakih, 2015. "Institutions and development in MENA region: evidence from the manufacturing sector," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 42(8), pages 717-732, August.
    • Handle: RePEc:eme:ijsepp:v:42:y:2015:i:8:p:717-732
    DOI: 10.1108/IJSE-07-2014-0136
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    Citations

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    Cited by:

    1. Hassan Sherry & Hussein Zeaiter, 2024. "IMF Conditionality and Government Education Spending: The Case of 10 MENA Countries," Economies, MDPI, vol. 12(9), pages 1-23, August.
    2. Kallab Tania El & Salloum Charbel, 2019. "Educational Attainment, Financial Support and Job Creation across Lebanese Social Entrepreneurships," Entrepreneurship Research Journal, De Gruyter, vol. 9(1), pages 1-12, January.
    3. Mahmoud Arayssi & Ali Fakih & Nathir Haimoun, 2019. "Did the Arab Spring reduce MENA countries’ growth?," Applied Economics Letters, Taylor & Francis Journals, vol. 26(19), pages 1579-1585, November.
    4. Hunjra, Ahmed Imran & Azam, Muhammad & Bruna, Maria Giuseppina & Bouri, Elie, 2023. "A cross-regional investigation of institutional quality and sustainable development," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 84(C).
    5. Al-Fayoumi, Nedal & Bouri, Elie & Abuzayed, Bana, 2023. "Decomposed oil price shocks and GCC stock market sector returns and volatility," Energy Economics, Elsevier, vol. 126(C).
    6. Arayssi, Mahmoud & Fakih, Ali, 2017. "Finance–growth nexus in a changing political region: How important was the Arab Spring?," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 106-123.

    More about this item

    Keywords

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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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