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MENA Export Performance and Specialization : The Role of Financial Sector Development and Governance

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World Bank (WB)

Abstract: Industry and financial profiles of MENA firms may underpin the observation that MENA country exports are below potential and skewed toward low value-added goods that are unable to spur rapid job creation and inclusive growth. To assess this link, the paper combines analysis highlighting external financing as a determinant of export performance, and analysis highlighting sector asset tangibility and governance. Why? Because high value-added sectors tend to have higher shares of intangible assets and to create innovative products requiring substantial research and development or investments, thereby making these sectors more dependent on external financing. Using sector- and firm-level export data with country-level indicators, the results indicate that countries with more developed financial sectors and stronger governance tend to have higher exports from sectors that are more reliant on finance external to the firm, and lower exports from sectors with higher shares of tangible assets. Interestingly, financial sector development boosts exports less in MENA than in non-MENA countries. To foster expansion of higher value exports, the results suggest a critical need for: (i) deeper financial sector development that strengthens market-based systems, such as asset registries and credit reporting agencies, and (ii) strengthening of legal and governance frameworks.
Type: Working Paper
Publications & Research
Publications & Research :: Policy Research Working Paper
Link: http://hdl.handle.net/10986/24157
Subject: LIVING STANDARDS
LINE OF CREDIT
CAPITAL MARKETS
BORROWER
LINES OF CREDIT
ECONOMIC GROWTH
INTANGIBLE ASSETS
FINANCIAL SECTORS
EXPORT SECTORS
INCOME
INTEREST
SAVINGS ACCOUNTS
PROPERTY RIGHTS
EXCHANGE
ECONOMIC DEVELOPMENTS
INCOME GROUP
GDP PER CAPITA
GOOD GOVERNANCE
LIQUIDITY
EXPORTS
DEVELOPING COUNTRIES
POLITICAL ECONOMY
WORLD DEVELOPMENT INDICATORS
INCENTIVES
VARIABLES
BORROWERS
CAPITAL STOCK
PRICE
BENCHMARKS
SECURE PROPERTY RIGHTS
EXTERNAL FINANCE
DEVELOPMENT
LEGAL FRAMEWORKS
MACROECONOMIC STABILITY
INFLUENCE
SAVINGS
DEVELOPMENT ECONOMICS
EXPORT GROWTH
CONTRACT ENFORCEMENT
RISK DIVERSIFICATION
LOW-INCOME COUNTRIES
DEMOCRACY
CORPORATE FINANCE
INTEREST RATES
MIDDLE-INCOME ECONOMIES
FINANCIAL INSTITUTIONS
MARKETS
CAPITAL MARKET
PRIVATE INVESTMENT
AGENCY PROBLEMS
FINANCIAL PRODUCTS
GOVERNANCE INDICATORS
INCOME LEVELS
MIDDLE-INCOME COUNTRIES
GLOBAL EXPORTS
TRADITIONAL BANKING
COUNTRY-LEVEL INDICATORS
AGENCY COSTS
INVENTORY
FINANCIAL SYSTEM
REAL ESTATE
LEGAL FRAMEWORK
SAVINGS ACCOUNT
EQUITY
HUMAN CAPITAL
VALUE ADDED
WAGES
GLOBAL MARKET
OWNERSHIP STRUCTURE
ECONOMIC OUTCOMES
DOMESTIC MARKETS
INTERNATIONAL TRADE
BARRIERS
VALUE
COMPETITIVENESS
FOREIGN DIRECT INVESTMENT
CREDIT
COMPARATIVE ADVANTAGES
FOREIGN INVESTMENT
WORKING CAPITAL
AGRICULTURE
JOB CREATION
SHARES
ASSETS
BENCHMARK
SECURITIES
GOVERNANCE INDICATOR
GOVERNANCE
ENFORCEMENT
INSURANCE
ECONOMIC DEVELOPMENT
TRADE
ECONOMIC INTEGRATION
BANK LOAN
GDP
GOODS
INVESTOR
THEORY
FINANCIAL DEVELOPMENT
INTANGIBLE
LEGAL SYSTEM
FINANCIAL MARKET
BUSINESS CLIMATE
INVESTMENT
SHARE
COMPARATIVE ADVANTAGE
INVESTMENT CLIMATE
COLLATERAL
FINANCIAL MARKETS
BUSINESS ENVIRONMENT
BANKING
POLITICAL STABILITY
FINANCIAL INTERMEDIARY
INVESTMENTS
LENDING
WORLD TRADE
EXTERNAL FINANCING
RISK OF EXPROPRIATION
FINANCIAL SYSTEMS
LABOR MARKETS
OUTCOMES
FINANCIAL SECTOR
ORGANIZATIONAL CAPITAL
CASH FLOW
FINANCIAL SECTOR DEVELOPMENT
DEVELOPMENT POLICY
CORPORATE GOVERNANCE




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