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Institutions and Development in MENA Region: Evidence from the Manufacturing Sector

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  • Arayssi, Mahmoud

    (Lebanese American University)

  • Fakih, Ali

    (Lebanese American University)

Abstract

This paper examines 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 (MENA) region using panel data through a fixed effect model. 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. 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.

Suggested Citation

  • Arayssi, Mahmoud & Fakih, Ali, 2015. "Institutions and Development in MENA Region: Evidence from the Manufacturing Sector," IZA Discussion Papers 8772, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8772
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    Cited by:

    1. 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.
    2. 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.
    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.

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    More about this item

    Keywords

    economic growth; institutional development; financial development; MENA region;
    All these keywords.

    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 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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