Abstract
This study is motivated by the ongoing interest of policy makers in the possible sources of job creation and destruction. The aim is to explore the dynamics of job creation, destruction and net job creation rates in Egypt and Turkey, including various firm characteristics, besides the firm size and age that have not been studied so far, such as the business-state relations (SBRs), whether the firm has been accredited with an international qualification of quality assurance and control and whether one of the owners is female. The analysis relies on firm level data derived from the World Bank Enterprise Surveys. We implement weighted ordinary least squares (OLS). The findings show constraints to finance and political instability are the main obstacles of SBRs in both countries, including also tax rates and constraints in electricity. The quality of SBRs is found to be positively associated to job growth.
Highlights
Employment growth, job creation and destruction and firm productivity have been always at the centre of interest of the governments around the globe and especially in the Middle East and North Africa (MENA) region, after the great recession of 2007
This study investigated the determinants of job flows in Egypt and Turkey and the impact of State-Business Relations (SBRs) on job flows
Effective SBRs and a supportive business environment is vital for the firm performance, innovation and job creation
Summary
Employment growth, job creation and destruction and firm productivity have been always at the centre of interest of the governments around the globe and especially in the Middle East and North Africa (MENA) region, after the great recession of 2007. While labor supply factors can be important, such as skills, working experience, education and health; yet, job reallocation is one of the main factors behind workers’ relocation activity. Evidence for this can be economic stagnation in the transition and developing economies, which cannot be explained only by the labor supply-side factors
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