Productivity and Resource Misallocation: Evidence from Firms in in Middle East and North Africa (MENA) Region Countries

Giovanis, Eleftherios and Ozdamar, Oznur (2018) Productivity and Resource Misallocation: Evidence from Firms in in Middle East and North Africa (MENA) Region Countries. UNSPECIFIED. Economic Research Forum.

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Abstract

Resource reallocation from low to high productivity firms can generate large aggregate productivity gains with further potential benefits to economic growth. This study examines the productivity and resource misallocation in a sample of countries in the Middle East and North Africa (MENA) region and Turkey. The analysis relies on data derived from the World Bank Enterprise Surveys over the period 2008-2016 of firms in Egypt, Turkey and Yemen. Furthermore, in the analysis we include various firm characteristics, and we explore major state-business relations (SBRs) and their association to resource misallocation. The results are mixed where in Egypt and Turkey female ownership and international quality are positively associated with productivity and allocation efficiency, while in all cases obstacles in SBRs present a negative and significant correlation with the firms’ performance and productivity, reducing the allocation efficiency and increasing the dispersions on output and capital.