MENA Region Research Articles

Modeling banking efficiency in the MENA region between 2017 and 2021: Data Envelopment Analysis approach

In this paper, we applied the Data Envelopment Analysis model under the assumption of variable returns to scale and output orientation to measure the efficiency of banks belonging to 12 MENA countries during the period 2017-2021. We divided the banks into two classes, conventional banks comprising 59 banks belonging to 11 countries and Islamic banks comprising 22 banks belonging to 7 countries. Concerning the 59 conventional banks, the results showed that the percentage of CCR-efficient conventional banks is low and does not exceed 16% and the average CCR-efficiency score reached 90% during the study period. We also found that Qatar is the only country whose conventional banks are BCC-efficient for all 5 years in a row, and that their CCR-efficiency scores are the highest, whereas conventional banks in Morocco and Jordan have the lowest average CCR-efficiency scores. For the 22 Islamic banks, the results showed that the percentage of CCR-efficient Islamic banks was low, at just 14%, and that their average CCR-efficiency score was 64%. We also found that Qatar is the only country whose Islamic banks are on average CCR-efficient over the 5 years, and that Moroccan Islamic banks have the lowest average CCR-efficiency score, reaching 36%.

Revolutionizing Healthcare Finances: Navigating the Impact of Innovative Technologies on Medical Claims Cost Containment in the MENA Region

Revolutionizing Healthcare Finances: Navigating the Impact of Innovative Technologies on Medical Claims Cost Containment in the MENA Region

Towards green evolution in urban Egypt: assessing Al Rehab City through LEED-ND and BREEAM-communities frameworks

This article provides a comprehensive analysis of the application of green neighborhood rating systems, specifically Leadership in Energy and Environmental Design-Neighborhood Development (LEED-ND) and Building Research Foundation Environmental Assessment Method (BREEAM)-Communities, in the context of Cairo, Egypt, focusing on Al Rehab City, a prominent urban area in New Cairo. The study begins by providing a background on Al-Rehab City, explaining its strategic planning, urban design, and demographic dynamics. It then delves into the current state of sustainable urban planning in Egypt, highlighting the challenges and opportunities that exist in this rapidly urbanizing context. The core of the article includes a comparative analysis of LEED-ND and BREEAM communities, assessing their adaptability and relevance to the Egyptian urban landscape, especially Al Rehab City. It explores many sustainability issues such as smart location, neighborhood pattern and design, green infrastructure, sustainable transportation, energy efficiency, water conservation, waste management, and community engagement. The discussion extends to examine how each of these aspects of sustainability applies to Al Rehab City, complemented by case studies and examples of current sustainable practices in Cairo. Furthermore, the article identifies specific local challenges in implementing these assessment systems, such as economic constraints, policy constraints, and cultural factors. It also suggests opportunities for improvement, including the potential for public–private partnerships, policy reforms, community engagement, technological innovation, and sustainable urban development modeling. In conclusion, the article provides insight into the future prospects of green urban planning in Cairo. The potential impact of adopting comprehensive assessment systems is discussed, with an emphasis on the role of Al Rehab City as a potential model for sustainable urban development in Egypt and the wider MENA region. The article aims to contribute to the discourse on sustainable urban planning, and provide a roadmap for integrating global sustainability standards into the unique context of Egyptian cities.

Development of the UAE financial system in a rapidly changing economic landscape

The UAE financial system is the country’s leading non+hydrocarbon sector which has shown good growth in the post–pandemic period. The country’s ability to become a leader in innovative technology not only among the GCC countries but also among the countries in the MENA region is beyond doubt. After the global financial crisis, which also affected the wealthy emirates of Dubai and Abu Dhabi, the UAE government took the vector to create a risk–oriented innovative financial system. The creation of major international financial centers, such as Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM), was the logical concept for creating the above system. Islamic financial institutions represented in the UAE operate within the framework of clear rules and standards that have been implemented by supervisory and regulatory authorities, precisely to build high–quality and transparent relationships between counterparties not only within one country, but also at the international level.

The relationship between financial sector development and individual economic well-being in Mena region: Panel feasible generalized least squares between 2005 and 2022

This research explores the nexus between financial sector development and individual economic well-being in 29 countries in the MENA region using panel data models over the period 2005-2022, based on the R programming language. The key financial variables considered are bank branches per 100,000 adults (AI), liquid liabilities (OI), deposit assets (DI), stock market capitalization (DM), and market capitalization of listed national companies (CM). Furthermore, the study employs 9 panel data models to examine the interaction; these models include Pooled OLS, Fixed Effects models (with individual, time, and two-way effects) using different approaches (within and between), and Random Effects models. Specification tests suggest the importance of accounting for fixed effects and addressing heteroskedasticity in the analysis. To enhance the analysis, 3-Panel Feasible Generalized Least Squares models were adopted to address challenges encountered by the model. The PFGLS First-Difference individual effect model demonstrated higher explanatory power and statistical significance of coefficients explaining 97% of the data’s variability compared to the PFGLS Individual and Time Fixed Effects models, providing a more reliable framework for understanding the connection between financial indicators and individual economic well-being. The findings conclude the significant influence of financial fluctuations on the dynamics of individual economic well-being. It proposes that policymakers have to focus on promoting financial sector development to achieve sustainable economic growth and improve individual economic well-being.

How Financial Inclusion Moderates the Curvilinear Nexus between Tangible Investment and Sustainable Firm Growth: New Evidence from the Middle East and North Africa Region

The aim of this study was to examine the curvilinear relationship between tangible investment and sustainable firm growth in the MENA region, as well as the moderating role of financial inclusion on this connection. To achieve this, we selected a sample of 465 firms over the period 2007–2020. Employing a system GMM model for the empirical analysis, the findings reveal that there is a curvilinear (inverted U-shaped) nexus between tangible investment and sustainable firm growth. Moreover, this study employs a moderating effect model to demonstrate that financial inclusion can enhance sustainable firm growth. The system GMM model further indicates that financial inclusion moderates the curvilinear relationship between tangible investment and sustainable firm growth. This study offers valuable insights for strategic firm planning and policy development, highlighting the role of financial inclusion in promoting firm sustainability.

The impact of COVID-19 on women’s labour market outcomes: evidence from four MENA countries

PurposeCOVID-19 has had various effects on women’s labour supply worldwide. This study investigates how women’s labour market outcomes in the MENA region have been affected by the stringency of governments’ COVID-19 responses and school closures. We examine whether women, particularly those with children at young age, reduced their labour supply to take care of their families during the pandemic.Design/methodology/approachTo investigate whether having a family results in an extra penalty to women’s labour market outcomes, we compare single women to married women and mothers. Using the ERF COVID-19 MENA Monitor Household Surveys, we analyse the key conditions underlying women’s labour market outcomes: (1) wage earnings and labour market status including remaining formally employed, informally, unpaid or self-employed, unemployed or out of the labour force and (2) becoming permanently terminated, being suspended, seeing a reduction in the hours worked or wages, or seeing a delay in one’s wage payments because of COVID-19. Ordered probit and multinomial logit are employed in the case of categorical outcomes, and linear models for wage earnings.FindingsWomen, regardless of whether they have children or not, appear to join the labour market out of necessity to help their families in the times of crisis. Child-caring women who are economically inactive are also more likely to enter the labour market. There is little difference between the negative experiences of women with children and child-free women in regard to their monthly pay reduction or delay, or contract termination, but women with children were more likely to experience reduction in hours worked throughout the pandemic.Research limitations/implicationsThese findings may not have causal interpretation facilitating accurate inference. This is because of potential omitted variables such as endogenous motivation of women in different circumstances, latent changes in the division of domestic work between care-giving and other household members, or selective sample attrition.Originality/valueOur analysis explores the multiple channels in which the pandemic has affected the labour outcomes of MENA-region women. Our findings highlight the challenges that hamper the labour market participation of women, and suggest that public policy should strive to balance the share of unpaid care work between men and women and increase men’s involvement, through measures that support child-bearing age women’s engagement in the private sector during crises, invest in childcare services and support decent job creation for all.

Navigating Financial Performance of the MENA Region Energy Sector: The Interplay of Working Capital and Leverage

This research delves into the influence of leverage considering potential outcomes within operational funds concerning the fiscal implications of the energy industry within the middle east and north Africa region. The research employed an empirical approach by collecting secondary data from the MENA region's energy sector between 2018 and 2022. To achieve this, the study formulated three hypotheses and utilized the empirical random panel data model. The investigative results affirm the validity of all three hypotheses. Additionally, they provide insights into the relationships among the variables in these hypotheses. Particularly noteworthy is the fact that certain results from the hypotheses contradict the expected theoretical impact. The article suggests that future researchers should delve into additional factors influencing firm performance, recognizing that diverse variables may yield varied outcomes. Broadening the study's scope by incorporating different timeframes and a more diverse array of firms could enhance the overall representativeness of research findings. Expanding this inquiry beyond the energy sector to encompass various industries might offer a comprehensive understanding of how working capital affects firm performance across distinct economic sectors. Subsequent empirical studies are advised to consider global health crises, political events, and other socio-economic developments in the MENA region. Examining events such as the COVID-19 pandemic and ongoing geopolitical conflicts like the Russian-Ukrainian and Israeli-Palestinian conflicts could illuminate how such incidents impact of the association among cash reserve, leverage, and company efficacy. To gain deeper insights into the causal distinctions among financial resources, and production form the company, researchers might investigate bidirectional results between each pair of variables using Granger causality tests. The findings from the present study are pertinent for energy sector companies, policymakers, and academia. Future research endeavors could focus on scrutinizing how the implications of operating funds on company procedures change when moderated by additional factors related to macroeconomics, providing practical insights for decision-makers.

CORRUPTION, GOVERNMENT’S ECONOM-IC PERFORMANCE AND INSTITUTIONAL TRUST IN THE MENA REGION

Motivation: Countries in the MENA region are perceived as highly corrupt. They are struggling to achieve clear results against corruption. Unfortunately, no country has reached a significant improvement on the Corruption Perceptions Index (CPI) published by Transparency International in 2021. The United Arab Emirates and Qatar are the top performers in the Region. The former was ranked 69 out of 100, the latter 63 out of 100. Libya (17/100), Yemen (16/100), and Syria (13/100) awfully damaged by the war are the worst. The state-of-the-art impacts trust at the national level and the performance of public institutions as well. Aim: This paper aims to study the relationship between corruption and trust, and its impact on public economic performance in the MENA region. It is based on the data provided by Arabbarometer, 2018-2019. Our sample includes 8215 individuals located in 12 countries in that region. To test all our hypotheses simultaneously, we have used the structural equation modeling method with SmartPLS software. The latent variable of the research model – corruption, fighting corruption, and economic performance of the government- all of them are used as a reflective measurement. However, trust is included in the model as a formative measurement. Results: The findings show that trust in public institutions, measured by a formative scale, is negatively impacted by the level of corruption (-0,36). It also depends on the efforts made by the state to fight corruption in public agencies and institutions (0,37). Trust is one of the most important components of social capital. The performance of public policies is highly correlated to the level of trust between public administration and individuals. The government’s economic performance depends on the level of that trust (0,341), the efforts made to fight corruption (0,173), and public corruption (-230). All hypotheses are significant at 1%.

Towards understanding the failure of new public management in the MENA region: Are informal networks to blame?

AbstractThis study aims to understand the main factors that contribute to the failure of implementing New Public Management (NPM) plans, as well as to investigate the potential link between informal networks, namely wasta, and this failure in organizations across the Middle East and North Africa (MENA region), with Jordanian public organizations taken as an illustrative case. A qualitative approach was applied, and a total of 24 semi‐structured interviews were conducted with HR officials in Jordanian public organizations, different state‐owned enterprises (SOEs), ministries, and government agencies (GAs). The results show that wasta contributes to the failure of NPM implementation in Jordanian public organizations, indicating that public employees contribute directly to the failure of NPM strategies in Jordanian public organizations for many reasons on top of which their resistance to these reform plans. Our findings also suggest that the implementation of NPM strategies failed to diminish the use of wasta in HRM practices even though wasta was an important reason to implement NPM. This study adds knowledge to the limited informal networks literature, by exploring the interplay between informal networks on one side, and the NPM literature on the other side.

Corporate Governance and Banking Stability in the MENA Region

This study investigates the determinants of banking stability through a comprehensive analysis of various financial and governance factors. Employing a panel regression approach, we examine the impact of key accounting variables, including capital adequacy ratio, return on assets, non-performing loans, bank size, and gross domestic product, as well as governance factors, covering board composition, audit quality, women on board, and the presence of risk committees, on the stability of banks operating in the MENA region between 2009 and 2020. Our findings reveal that most of these variables have a positive impact on banking stability. However, non-performing loans and the presence of independent directors on the board exhibit a negative relationship with banking stability. Therefore, it is found that banks under consideration maintain stability in tandem with good corporate governance practices and economic expansion, thereby positively influencing the MENA banking sector. The study recommends researchers to delve deeper into the complex relationships between these variables and banking stability and suggests that future studies explore additional factors that might impact the stability of banks in the MENA region.

EU delegations as intermediaries of perceptions of the EU: A view from the MENA region

ABSTRACT The European Commission in its 2015 study on the perceptions of the EU acknowledged that mutual perceptions held by actors in the international arena affect their expectations about the other’s behaviour and hereby guide the interpretation of the other’s actions. Knowledge of how and what image of the MENA countries and of the EU is conveyed by country delegations is important for understanding whether the information that influences EU foreign policy-making is representative, and of whom. EU delegations are an acknowledged source of knowledge that feed into EU policymaking, and proposals have even been made for strengthening their role. Based on interviews with heads of delegations/Ambassadors in 2021, four interlinked categories of concerns affecting the perceptions of the EU are identified: historical legacy; knowledge about and expectations towards the Union; competing values and aims; and the EU’s internal policy inconsistencies. The findings in the interviews are contextualized through an analysis of previous research on the perceptions of the EU. Further, the article discusses the role of delegations in EU policy-making and invites to take a critical view of Ambassadors´ ‘perceptions of the perceptions of the EU’.

Financial Technologies for All MENA citizens: Tackling barriers and promoting inclusion

The digital divide within the financial sector, closely intertwined with the rapid evolution of financial technologies, commonly known as "FinTech," has fundamentally reshaped the landscape of financial services. These innovations have ushered in novel avenues for accessibility, enhancing the security of financial transactions and transcending traditional spatiotemporal constraints. This paper embarks on a journey to address key inquiries within the MENA region. It explores digital financial inclusion levels across MENA countries, identifies segments facing digital financial exclusion, scrutinizes the role of the digital divide, often compounded by a lack of financial literacy, as a barrier to financial inclusion, and investigates how FinTech can serve as a catalyst for inclusive development, with a specific focus on marginalized groups like women and the elderly. Our research employs a comprehensive mixed-methodological approach. We draw from micro-level data sourced from 9053 individuals, extracted from the World Bank's latest Global Findex 2021 database. Our comparative analysis, rooted in a two-step principal component analysis method to create the MENA Digital Financial Inclusion Index (DFII), shedding light on the current state of digital financial inclusion in the MENA region. Despite recent initiatives, our findings underscore that digital financial inclusion in the region remains relatively low. Furthermore, our estimations, based on the Heckman selection methodology, emphasize the pivotal role played by factors such as educational attainment, labor force participation, information and communication technologies, and internet access as primary drivers of digital financial inclusion in the MENA region. Our research contributes a substantial body of empirical evidence regarding digital financial inclusion levels across MENA countries, charting a path toward bridging the digital divide within the financial sector. These strategies encompass enhancing digital financial literacy, catalyzing broader participation in the labor market, and facilitating expanded access to mobile phones and the Internet. In light of our comprehensive dataset, the policy implications drawn from our study are of paramount interest to financial sector regulators in the MENA region, grounded in the real-life experiences of the individuals constituting our database, with the overarching goal of elevating digital financial inclusion in the region to new heights.

Development of a composite drought indicator for operational drought monitoring in the MENA region

This paper presents the composite drought indicator (CDI) that Jordanian, Lebanese, Moroccan, and Tunisian government agencies now produce monthly to support operational drought management decision making, and it describes their iterative co-development processes. The CDI is primarily intended to monitor agricultural and ecological drought on a seasonal time scale. It uses remote sensing and modelled data inputs, and it reflects anomalies in precipitation, vegetation, soil moisture, and evapotranspiration. Following quantitative and qualitative validation assessments, engagements with policymakers, and consideration of agencies’ technical and institutional capabilities and constraints, we made changes to CDI input data, modelling procedures, and integration to tailor the system for each national context. We summarize validation results, drought modelling challenges and how we overcame them through CDI improvements, and we describe the monthly CDI production process and outputs. Finally, we synthesize procedural and technical aspects of CDI development and reflect on the constraints we faced as well as trade-offs made to optimize the CDI for operational monitoring to support policy decision-making—including aspects of salience, credibility, and legitimacy—within each national context.

Comparing AlUla and The Red Sea Saudi Arabia’s Giga Projects on Tourism towards a Sustainable Change in Destination Development

This paper examines architecture for tourism, focusing on destination design. In the past forty years, tourism destinations and their impact have been affected and transformed by emerging topics such as the impact of social media and the necessity of sustainable indicators in the tourism industry. In the global panorama of ongoing tourism transformations, Saudi Arabia has recently established new governmental opening regulations that started in 2019 for visitors and tourist visa entry. The country is facing a rapidly transforming economy, and new destinations for tourism will impact the country’s growth in the coming years as part of the Sustainable Destination Program in alignment with the ambitious targets of the Saudi National Vision 2030. The adopted methodology of the study compares selected parameters of two significant Saudi Arabian case studies, AlUla and The Red Sea Project (TRSP), for the ongoing sustainable tourism destination development of planned tourist giga projects. According to the findings, AlUla and TRSP demonstrated an intense commitment to sustainable tourism through their efforts concerning protected areas, environmentally friendly transport, and significant rewilding and reforestation. The research’s conclusion emphasizes Saudi Arabia’s commitment to innovative thinking, long-term growth, and sustainable tourism. The study’s implication is primarily suited for destination design; it suggests potential applicability even in smaller-scale tourism development projects or additional comparisons in sustainability design approaches in diverse contexts, particularly in the MENA region.

Measuring the impact of public agricultural spending on food security by applying it to the MENA region (standard study)

Measuring the impact of public agricultural spending on food security by applying it to the MENA region (standard study)

Blue Economy Determinants and Economic Growth: Implications Upon MENA Region Countries

Blue Economy Determinants and Economic Growth: Implications Upon MENA Region Countries

The dynamics of carbon emissions, energy, income, and life expectancy: Regional comparative analysis.

This paper examines the linear effects of economic growth on carbon emissions and their impact on mortality and morbidity rates in specific regions sub-Sahara Africa, Middle-East and North Africa, Europe and Central Asia (SSA, MENA, ECA). By analyzing longitudinal data for 82 panels over 30 years, we investigate the relationships between energy usage, per capita GDP, life expectancy, and carbon emissions. Our estimation results show positive correlations between energy use, carbon production, and life expectancy in both the combined sample and individual regions. However, death rate has a negative relationship with carbon production in the combined sample, MENA, and SSA regions. Per capita GDP positively influences carbon emissions and life expectancy in the combined sample and ECA, MENA, and SSA regions. We also identify asymmetric relationships between per capita GDP and carbon production, with evidence supporting the Environmental Kuznets Curve hypothesis for the combined and ECA samples, and an N-trajectory for SSA. These findings emphasize the importance of region-specific approaches to sustainable development, considering the unique environmental and economic challenges each region faces. Policymakers should consider our research insights when designing policies to mitigate the negative impacts of economic progress on the environment.

Determinants of Institutional Ownership in the MENA Region

This study explores the main determinants of institutional ownership in the MENA region. Using a large sample of 262 listed companies across MENA countries, this study focuses on company and country characteristics that might explain institutional behavior. We attempt to answer the following questions: First, what are the main categories of institutional investors operating in MENA countries? Secondly, what factors drive institutional ownership? Results reveal a weak presence of institutional investors in the MENA region. Unlike foreign and passive investors, domestic and active institutional investors dominate the companies’ ownership. Such findings raise serious issues about how to attract foreign institutional investors. Results also suggest that value stocks appeal to institutional investors, whatever their origin (foreign or domestic) and kind (active or passive). Institutional investors look for large, profitable, and liquid companies that pay high dividends. They prefer investing in highly indebted companies as they consider debt an efficient mechanism to mitigate agency problems. Corporate governance and information disclosure are also crucial determinants of institutional ownership. However, foreign-domestic and active-passive institutional investors have different investment preferences. Our study would contribute to a better understanding of ownership endogeneity within an emerging context. Results would help professionals, managers, and policymakers to adopt appropriate reforms to offer an appealing business climate and attract a large base of institutional investors, not only foreign and active investors.

On the nexus between code of business ethics, human resource supply chain management and corporate culture: evidence from MENA countries

PurposeThis paper aims to analyze the relationships between human resource supply chain management (HRSCM), corporate culture (CC) and the code of business ethics (CBE) in the MENA region.Design/methodology/approachIn this study, the author adopted a quantitative approach through an online Google Form survey for the data-gathering process. All questionnaires were distributed to the manufacturing and service firms that are listed in the Chambers of the Industries of Jordan, Saudi Arabia, Morocco and Egypt in the MENA region using a simple random sampling method. About 567 usable and valid responses were retrieved out of 2,077 for analysis, representing a 27.3% response rate. The sample unit for analysis included all middle- and senior-level managers and employees within manufacturing and service firms. The conceptual model was tested using a hypothesis-testing deductive approach. The findings are based on covariance-based analysis and structural equation modeling (SEM) using PLS-SEM software. The author performed convergent validity and discriminant validity tests, and bootstrapping was also applied.FindingsThe empirical results display a significant and positive association between HRSCM and the CBE. The CC and the CBE tend to be positively and significantly related. Therefore, HRSCM can play a key role in boosting and applying the CBE in firms. For achieving the firm purposes, more attention to the HR personnel should be paid to implement the CBE. The high importance of the CBE becomes necessary for both the department and the firm.Practical implicationsSuch results can provide insightful information for HR personnel, managers and leaders to encourage them to develop and maintain an effective corporate code of conduct within their organizations.Originality/valueThis paper tries to explore the linkages between HRSCM, CC and CBE in the Middle East region due to the lack of research available that analyzes the relationship between them. Not only that, but it also offers great implications for Middle Eastern businesses.