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What Factors Influence Firm Perceptions of Labour Market Constraints to Growth in the MENA Region?

Author

Listed:
  • Ali Fakih
  • Pascal L. Ghazalian
Abstract
Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. This paper aims at examining the implications of firm characteristics, national locations, and sectoral associations for the perceptions of firms concerning two basic labour market constraints: labour regulations and labour skill shortages. The empirical analysis is carried out using firm-level dataset sourced from the World Bank’s Enterprise Surveys database. A bivariate probit estimator is used to account for potential correlations between the errors in the two labour market constraints’ equations. We implement overall estimations and comparative cross-country and cross-sector analyses, and use alternative estimation models. The empirical results reveal some important implications of firm characteristics (e.g., firm size, labour compositions) for firm perceptions of labour regulations and labour skill shortages. They also delineate important cross-country and cross-sector variations. We also find significant heterogeneity in the factors’ implications for the perceptions of firms belonging to different sectors and located in different MENA countries. This paper provides policy-makers with information needed in the design of labour policies that attenuate the impacts of labour market constraints and enhance the performance of firms and the long-run economic growth.

Suggested Citation

  • Ali Fakih & Pascal L. Ghazalian, 2015. "What Factors Influence Firm Perceptions of Labour Market Constraints to Growth in the MENA Region?," CIRANO Working Papers 2015s-46, CIRANO.
    • Handle: RePEc:cir:cirwor:2015s-46
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    File URL: https://cirano.qc.ca/files/publications/2015s-46.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lucía Mateos-Romero & María del Mar Salinas-Jiménez, 2018. "Labor Mismatches: Effects on Wages and on Job Satisfaction in 17 OECD Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 369-391, November.
    2. Ali Fakih & Nathir Haimoun & Mohamad Kassem, 2020. "Youth Unemployment, Gender and Institutions During Transition: Evidence from the Arab Spring," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(1), pages 311-336, July.
    3. Hosny Amr, 2017. "Political Stability, Firm Characteristics and Performance: Evidence from 6,083 Private Firms in the Middle East," Review of Middle East Economics and Finance, De Gruyter, vol. 13(1), pages 1-21, April.
    4. Zakia Jabeen & Jabir Ali & Nadia Yusuf, 2021. "Difference in business obstacles faced by firms across sizes: evidence from enterprise survey data of India," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 71-81, December.

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    More about this item

    Keywords

    labour regulations; labour skill shortages; labour market constraints; bivariate probit model; MENA region;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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