The Effect of Institutional Quality on Export performance of Middle East & North-Africa Region
- January 17, 2020
- Posted by: RSIS
- Categories: Economics, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue I, January 2020 | ISSN 2454–6186
The Effect of Institutional Quality on Export performance of Middle East & North-Africa Region
Abdikarim Bashir Jama
PhD Candidate, School of Economics, Banking and Finance, University Utara Malaysia, Sintok, Kedah, Malaysia
Abstract:- The paper investigates the relevance of governance indicators for the export performance of the Middle East and North African (MENA) members of countries. Voice and accountability, political stability and regulatory quality are introduced in an augmented gravity model with a panel data set over 2010-2017. All institutional variables display an insignificant association with export performance except political stability and absence of violence that becomes significant with MENA exports, whereby it has the largest influence. Therefore, to conclude the governments should give high precedence to develop broad policy reforms that encourage institutional development and trade within the region and at the global level to enhance the global competitive position of the MENA region.
Keywords: Export Performance, Regulatory Quality, Political Stability, Voice and Accountability, Labor Force Participation Rate
I. INTRODUCTION
The current research purposes to investigate the influence of institutional quality on export performance for the section of Middle-East and North-African nations namely: Algeria, Egypt, Qatar, United Arab Emirates, and Morocco. These analyses are encouraged by the circumstance that the business atmosphere in which the company’s developed their enterprises is anticipated to impact the overall achievement of the whole economy and in specific, worldwide trade. Moreover, highly-functioning institutions enable global transactions and decrease the uncertainty related to trade. According to Handlley and Limao (2017); Bown and Kenynes (2017) lately revealed that actions, such as risks to renegotiate trade contracts can be damaging to economic development due to the risk they involve.
Nevertheless, in this paper, we postulate the influence of governance on export performance and assume that superior institutions might reduce unforeseeable events and reduce trade costs, and therefore could have a positive impact on exports. We concentrate on the economic region of the Middle East and North Africa (MENA), where by many nations faced the Arab Spring which resulted in the changes in the leadership and power vacuums. Further more, the MENA region experiences fragile governance indicators at various stages namely: lower level in political rights, inefficient laws and regulations, and malfunctioning of public management.
