Egyptian Economy Research Articles

Impact of Exchange Rate Fluctuations on Money Velocity in the Egyptian Economy

Impact of Exchange Rate Fluctuations on Money Velocity in the Egyptian Economy

Financial inclusion and Financial Performance: The interplay role of capital adequacy requirements in Egyptian Banks

PurposeFinancial inclusion aims to provide affordable financial services, including banking, loans, equity, and insurance products, to underserved populations. This study aims to examine the moderating effect of a bank’s capital adequacy ratio (CAR) on the nexus between financial inclusion (FI) and a bank’s financial performance (FP) in the Egyptian setting.Design/methodology/approachThe study uses two empirical linear mixed models (LMM) to test the moderation effect of a bank’s CAR on the association between FI and FP. The study sample comprises 360 bank quarter-observations of 10 listed banks in the Egyptian Stock Exchange (EGX) from 2013 to 2021.FindingsThe findings show that the bank’s CAR strengthens the association between FI dimensions, namely, deposit growth, loan growth, and the number of employees, and the bank’s FP with contradicted directions.Research limitations/implicationsThis study provides policymakers insights into the crucial role of complying with banking regulation, namely, the capital adequacy ratio (CAR) and expanding financial inclusion practices to enhance and improve the bank’s FP. Thus, encouraging more strategies and facilities toward financial inclusion.Originality/valueDue to the scarcity of financial inclusion literature in emerging economies, this paper extends FI literature by highlighting the moderation impact of a bank’s CAR on the relationship between FI dimensions and FP in the Egyptian banking sector. Consequently, this study clarifies this beneficial relationship, which may have significant implications for restoring the challenges faced by the Egyptian economy following the critical events it went through, which, in turn, impacted the country’s poor and vulnerable.

Econometric Analysis of China-Egypt Bilateral Relations: Trade, Investment, and Economic Cooperation

This paper presents a comprehensive econometric analysis of the bilateral relations between China and Egypt, focusing on trade dynamics, investment flows, and broader economic cooperation. Utilising a range of statistical methods and data from 2000 to 2023, the study examines how the evolving geopolitical landscape has influenced economic ties between the two nations. Special attention is given to the Belt and Road Initiative (BRI) and its impact on bilateral trade and investment. The analysis reveals a significant increase in bilateral trade volume, with China emerging as a key investor in various sectors of the Egyptian economy. Furthermore, the paper explores the socio-economic effects of these relations on local industries, employment, and regional development in Egypt. The study also addresses the challenges and opportunities presented by this partnership, providing policy recommendations for enhancing mutual economic benefits and sustainable development.

Role and importance of Egypt in regional geopolitics

The article analyzes the role and significance of the Arab Republic of Egypt in regional geopolitics at the present stage. The author pays special attention to the specific role of its armed forces, which not only perform tasks to protect the state from external threats and combat terrorism,but also take an active part in the internal political and economic life of the country. The peaceful nature of Egypt's foreign policy is emphasized, Cairo's desire to take part in the work of the UN, Arab League, AU, OIC, BRICS, EU, other international and regional organizations, and to maintain mutually beneficial relations with leading world powers, Israel, Arab, African and Asian countries on a bilateral basis. Diversifi cation of Egypt's foreign policy and foreign economic relations with foreign countries, maintaining a balance of interests of all countries interested in Egypt ensure stability and progressive development of the state in all areas. The author also points out the continuing objective diffi culties and even crisis phenomena in the Egyptian economy: infl ation, devaluation of the national currency, large external borrowings, youth unemployment, loss of income from the operation of the Suez Canal, the tourism industry, etc. The next serious test for the country was the tragic events in the Gaza Strip, when the Israel Defense Forces launched a large-scale military operation against the militants of the radical Islamist groups Hamas and Islamic Jihad (the latter is recognized as terrorist and is banned in Russia). The threat of an uncontrolled exodus of hundreds of thousands of refugees from this Palestinian exclave to the Sinai Peninsula requires vigilance and preventive measures from Egypt's security forces. Along with this, Egypt remains one of the leaders in the Middle East, Africa, and among Muslim countries. Cairo's emphatically independent foreign policy and neutrality in regional conflicts allows it to maintain strategic partnerships with the United States while simultaneously developing relations with Russia and China in all areas.

Analyzing Exchange Rate Effects on Trade: Empirical Evidence

In this study, we aimed to find a fair exchange rate for Egypt, exploring how exchange rate policies affect the country’s economic growth and food security. We also sought to answer an important question for Egyptian policymakers: “Do current exchange rate policies help reduce Egypt’s trade deficit?”. We used two methods in our research: First, we applied the purchasing power parity (PPP) method to determine the equilibrium real exchange rate (ERER). Then, we combined the computable general equilibrium model (CGE) with the ERER value from the PPP method to observe how different sectors interact with the overall economy and understand how household incomes and poverty levels are related. Our findings showed that the fair exchange rate is EGP 38.5 per US dollar, according to the PPP method. This new exchange rate may significantly impact the Egyptian economy. Some impacts are positive, such as better real GDP, more exports, and fewer imports; however, these are minor and not significant. On the downside, it may lead to higher inflation, increased prices for goods, and reduced consumption. Moreover, this study highlights the importance of having balanced exchange rate policies that consider Egypt’s unique economic situations, and challenges and align with other economic policies. Experience and reality have shown that exchange rates alone are not the only solution.

The role of exchange rate systems in enhancing the competitiveness of the Egyptian economy for the period 1990-2019

The issue of competitiveness is of increasing importance with the expansion of the scope of economic globalization and the emergence of modern theories of international trade. Achieving export competitiveness has become a goal pursued by all countries. The importance of research in explaining the competitiveness of the Egyptian economy in the international market and the role of this in developing the country’s merchandise exports in light of the intensity of competition is complemented by the importance of research in explaining the competitiveness of the Egyptian economy. Among the global economies, as for the research problem, it stems from the extent of the impact of building a competitive Egyptian economy and the role it plays in enhancing its commodity sources. The research hypothesis focused on several hypotheses, including: Does Egypt have the capabilities to build competitive premiums, and is it possible for Egyptian commodity exports or to deal with the exports of other countries in the international market in While the research aimed to demonstrate the possibility of building a competitive economy in light of existing capabilities, the research methodology relied on shifting from the deductive approach in analyzing the theoretical side of the research to the inductive approach that aims to estimate the efficiency of the Egyptian economy and the possibility of creating a competitive advantage for it through statistical data and analysis of this data and indicators. Egyptian economic competition and its impact on merchandise exports to Egypt. The research concluded with the standard analysis of this data. As for the limits of the research, the research relied on temporal and spatial boundaries. The temporal boundaries were represented by covering the period between the years 1990 and 2019. As for the spatial boundaries, the research focused on Egypt. As for the structure of the research, it was It consists of three sections. The first section focused on the theoretical and conceptual framework of competitiveness and exchange rate systems. The second section only dealt with the development of exchange rate systems in Egypt, while the research concluded in the third section, which focused on the econometric analysis of the data under study.

Examining Monetary Policy Cyclicality in Egypt during Crisis Time: Global Financial Crisis versus COVID-19 Pandemic

Egypt has been exposed to two recent shocks: the global financial crisis of 2008 and the COVID-19 Pandemic of 2020. Though the origin and the implications of the two shocks are quite different, they bear some similarities in terms of the sharp decline in global economic growth and negative implication on the Egyptian economy. The present study attempts to assess the cyclicality of monetary policy in Egypt during the two crises. To this end, both descriptive and econometric techniques are employed in this study to reveal the cyclicality of monetary policy. On the descriptive side, the correlation between the cyclical component of policy rate and that of real GDP is calculated. Moreover, both an ARDL and NARDL approach are estimated to derive the augmented Taylor rule for the cyclical component of policy rate. Two dummy variables reflecting the two crises along with their interaction with output gap are incorporated in the model to disentangle the impact of the two crises upon monetary policy cyclicality. The study concludes that monetary policy in Egypt is more acyclical and that its response to changes in output gap is statistically insignificant, during both normal times and crisis time.

Crude Oil Prices and the Egyptian Economy Evidence from the Stock Market

This paper investigates two important things; the role of crude oil prices in explaining the Egyptian stock market return, and what factors derive from Egyptian crude oil prices. Using 6 log difference time series variables this paper finds that multiple regression is an inappropriate model to test the two goals mentioned above. On the other hand, using Vector Autoregression (VAR Model) is much more profitable in achieving the paper’s goals. Although the VAR model results are more reliable, crude oil price fails to explain the Egyptian stock market return because Egypt is not a big oil exporter. Furthermore, the VAR model shows that the Energy sector index, stock world index (S&P 500 the proxy), stock exchange index, exchange rate, and the global financial crisis are all factors that derive and determine the Egyptian crude oil price.

The relationship between women's empowerment and staff turnover in the Egyptian hospitality labor market

PurposeAlthough the hospitality sector is considered the most active and profitable sector in the Egyptian economy, it suffers from the non-stop immigration of skilled manpower and the high rates of labor turnover. One of the apparent solutions for this problem that could be implemented is empowering Egyptian females to play an active role in the success of this sector. Females faced many obstacles while working in hospitality, including prevailing social perception, the culture of shame, the traditional negative view of feminine hoteliers, long working hours and the shift system, which led to weak females' desire to enroll in the hospitality field. The study aims to determine how empowering Egyptian women in the hospitality industry affects staff turnover.Design/methodology/approachTo achieve the aim of the study, a sample of four- and five-star resorts in Red Sea, Egypt, was under study. A self-administrated questionnaire was addressed to female hotel employees, and 140 forms were statistically analyzed in addition to 14 semi-structured interviews with hospitality experts.FindingsThe study recommends that hotels should start re-tailoring policies to activate Egyptian females' role in reducing the high rate of hospitality labor turnover through increasing their work engagement (WENG) (as a mediator) by adopting a decent work environment and motivating them to get promoted to hold senior positions.Research limitations/implicationsIn spite of some noteworthy contributions, the authors would like to point out certain shortcomings. The sample was homogeneous, consisting of female hotels employees in Egypt, but the findings are generalizable to other Arabian communities. Nonetheless, the authors feel that they have supplied some suggestive evidence, even for the most careful reader who wants to further study these elements of working attitudes in the hotel business.Originality/valueAccording to the authors' knowledge, this study is among the few studies covering females' reluctance to continue working in the hospitality field.

The economic effects of business incubators and their role in promoting the transformation of the circular economy in the Egyptian economy

The economic effects of business incubators and their role in promoting the transformation of the circular economy in the Egyptian economy

Improving the Energy Sector and Renewable Energy Resources in Egypt (Challenges, Achievements, And Most Important Projects)

Egypt faces a challenge in providing sufficient resources for energy needs, especially, since Egypt relies mainly on oil and natural gas to meet its energy needs, on which the percentage of dependence has reached 95% of Egypt’s total energy needs. All studies indicate that despite Egypt’s possession of reserves from these sources, due to the growing use of these resources and the high cost of extracting them, Egypt will face a deficit in covering its needs from these resources. Although it is expected that the balance between oil and gas production will return with uses within few years after overcoming the economic difficulties that faced the oil and gas sector, according to Egypt’s energy strategy for the year 2030 and its current update to reach it for the year 2035, it is expected that Egypt will become a permanent importer. Oil and gas within a period not exceeding several years from the beginning of the third decade of this century. This situation represents an additional challenge to the Egyptian economy, as it becomes exposed to price turmoil in the global energy markets, which cannot be expected or controlled. This is in addition to the drain on Egypt’s foreign exchange resources, the impact on the balance of trade, and the reduction of the competitiveness of the national economy. Therefore, the diversification of energy sources must be reconsidered in order to achieve maximum benefit from local resources, which are characterized by sustainability and stability in prices, which are features that characterize electricity production projects from renewable sources, taking into account Egypt’s richness in these resources. Therefore, Egypt has already started implementing many projects that work to provide Egypt’s energy needs, through the project of the nuclear power plant in “Al-Dabaa” in northern Egypt on the Mediterranean coast, as well as power generation projects from renewable energy sources available in Egypt, such as “wind energy” and “solar energy”.

Patriotic Advertising: An Opportunity for Resuscitating the Egyptian Economy Rekindling the Egyptian Domestic Brands

Patriotic Advertising: An Opportunity for Resuscitating the Egyptian Economy Rekindling the Egyptian Domestic Brands

The Impact of offshoring services on the Egyptian Economy

The Impact of offshoring services on the Egyptian Economy

The Impact of Russia-Ukraine War on The Egyptian Stock Market

The study aims to investigate the Egyptian stock market response to the Russia-Ukraine war, by employing GARCH model on firms registered in Egyptian Stock Market for a period from March 2022 to March 2023. It is expected that the war will have a significant negative impact on Egyptian economy through food, energy, and Tourism, which will have a significant implication on Egyptian stock market, in addition to the direct effect of the war on the Egyptian stock market. the Russia and Ukraine market represent 40% of Egyptian tourism market. Therefore, Egypt witnessed increase in food and energy prices which affects the state general budget and foreign currency reserve. The inflation and supply chain disruption resulted from the war affect the performance of Egyptian companies which affect negatively on stability of Egyptian stock market and lead to exit of foreign investors. Keywords: Russia-Ukraine war, Egyptian Stock Market, Egyptian Economy.

Inflation Threshold in the Context of Structural Breaks: Evidence from Egypt Using the Logistic Smooth Transition Regression Approach

The disparities in structure and nature of developing economies, in terms of their level of development, yield mixed results on the linear/nonlinear relationship between inflation and real GDP (i.e., the inflation threshold), which should be revisited. No study examined the effects of inflation on real GDP in Egypt, particularly after the 2011 revolution and the November 2016 exchange rate floating. This study empirically investigates the inflation threshold in Egypt over the period 1976-2019. In other words, it seeks to determine the optimal level of an inflation rate such that beyond it, inflation becomes a destructive element to economic growth. To this end, the logistic smooth transition regression (LSTR) has been performed. Considering structural breaks, this study checked the stationarity of the variables with the Kapetanios unit root test. Results of the LSTR technique highlight a statistically significant positive relationship between inflation and GDP growth in the lower regime at 9.32%. Beyond this threshold, inflation harms GDP growth, indicating an asymmetric relationship between the two variables. Such a specified estimated inflation threshold could assist monetary authorities in setting their inflation target to be below that threshold. This study recommends that policymakers restrict inflation and keep it below the estimated threshold, considering that inflation in the Egyptian economy is derived from the aggregate supply, demand factors and the production apparatus's inelasticity.

COMPARATIVE ANALYSIS OF THE IMPACT OF OIL PRICE SHOCKS ON SELECTED MACROECONOMIC VARIABLES IN NIGERIA AND EGYPT

This paper empirically analyzed the impact of oil price shock on selected macroeconomic variables in the African oil-producing countries using Nigeria and Egypt from 1983 to 2020 and 1984-2020 for Egypt, respectively, due to data availability. The study employed the structural vector error correction model (SVECM) due to co-integration among the variables. It was revealed that the response to and significance of the oil price shock differs between the two countries; oil price shock caused an economic boom in Nigeria while it shrunk the Egyptian economy; the broad money supply only responded to the oil price shock in Egypt; the general price level responds positively to the oil price shock in Egypt but respond negatively in Nigeria; oil price shock caused exchange rate depreciation in Nigeria but appreciation in Egypt, an oil price shock caused interest rate reduction in Nigeria but an increment in Egypt. Therefore, policymakers must consider the sensitive nature of their macroeconomic variables to oil price shocks and continue to make proactive decisions that will reduce, if not eliminate, its negative impact. Again, the government of oil exporting countries should ensure diversification of their economy during the oil boom in sectors that would help to caution against the impact of adverse oil price shocks in the economy when such is experienced.

Developing Mineral Wealth in The Egyptian Economy in Light of Attracting Foreign Direct Investment and Its Impact on Improving Long-Term Financing Tools (Study Of Gold Mining)

The study aims to determine the impact of foreign direct investment on improving long-term financing tools with the aim of developing mineral wealth and the Egyptian economy by applying it to gold mines in Egypt, and also clarifying the concept of foreign direct investment and the extent of its ability to improve long-term financing tools and achieve development of mineral wealth and also the Egyptian economy. Below is a presentation of the most important results: (1) 1) The results of testing the first sub-hypothesis indicate, “There is a positive relationship between foreign direct investment variables and the volume of business of national or foreign drilling companies operating in the country.” (2) The variables of foreign direct investment (the number of licenses issued for exploration annually – the added licensed area – the total investments spent in annual exploration operations – the total tax collections for companies working in the production of gold from mines in Egypt – the total royalty collected from the Central Bank from companies producing gold from Egyptian mines) affect Positive impact on the variables of the dependent variable, long-term financing instruments, which are (the volume of business of national or foreign drilling companies operating in the country – the volume of business of aerial survey companies – the number of newly added mines – the volume of mine production newly added annually to the service) Keywords: Mineral Wealth – The Egyptian Economy – Foreign Direct Investment – Long-Term Financing Tools

Global Warming impact on Egyptian Economy Versus Mexican Economy

Global Warming impact on Egyptian Economy Versus Mexican Economy

Digital Transformation and its Impact in Egypt: A Comprehensive Literature Review

Purpose: The purpose of this study is to review all studies that have analyzed the correlation between digitalization and economic growth. Additionally, this review analyses previous studies investigating the impact of digitalization on the labour market. Theoretical framework: Several technological advances, including digitalization, intelligent automation, and software, have encouraged countries and industries to set up visions and plans that will lead to economic growth and strengthen their competitive position. This study will provide a holistic framework highlighting the current state and potential growth areas of digitalization in the economy. Design/Methodology/Approach: In this study, we examine and organize current research literature that explores the impact of digitalization on economic growth and the transformation in the labour market, quantitatively or qualitatively. Findings: The ability of Egypt to develop the digital transformation is related to readiness to obtain the framework of five pillars: legislation, technical and organizational capabilities, capacity building, and cooperation with other stakeholders. This imposes on the government the importance of continuing work to ensure the sustainability of strategies, measures, and adaptation to face the accelerated nature of cyber threats development according to the state of technical progress. Research, practical & social implication: This study will provide a holistic framework highlighting the current digitalisation state, the impact of digital transformation on economies, and the potential strategies to adopt digitalisation. Originality/Value: This study comprehensively reviews the correlation between digitalization and economic growth and the labour market's evolving requirements focusing on the Egyptian economy.

The Impact of Dollarization on the Agricultural and Industrial Sectors in the Egyptian Economy Post the 2011 Revolution

The Impact of Dollarization on the Agricultural and Industrial Sectors in the Egyptian Economy Post the 2011 Revolution