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Service sector restrictiveness and economic performance: an estimation for the MENA region

Bottini, Novella, Marouani, Mohamed Ali and Munro, Laura (2011) Service sector restrictiveness and economic performance: an estimation for the MENA region. The World Economy, 34 (9). pp. 1652-1678. ISSN 0378-5920

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Abstract

This article aims to assess barriers to service provision in the banking and telecom sectors of four Middle East and North Africa (MENA) countries, and the impact of these barriers on firm performance. Our methodology involves the computation of aggregate and modal trade restrictiveness indices (TRIs) by sector, and utilisation of these TRIs as regressors of firms' economic performance. Our analysis shows that significant regulatory reforms have taken place in the service sectors over the last decade in the MENA region, but that a broad range of restrictions still remain. The most significant change in these service sectors has been the lifting or softening of constraints on foreign equity participation. These regulatory reforms, however, have had varying degrees of impact on market structure depending on the country, the sector and the mode. Moreover, service restrictions have had an impact on economic performance in the three studied sectors. While a rent-creating effect seems to dominate restrictions on banking and fixed telecom sectors, a cost-inefficiency effect seems to dominate the mobile telecom sector. Finally, we find evidence of interactions between modal restrictions for banking services. Our results suggest a complementarity between Modes 3 and 1, as well as a substitution effect between Modes 3 and 4 in the banking sector.

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=0378-5920&...
Additional Information: © 2011 Wiley-Blackwell
Library of Congress subject classification: D History General and Old World > DT Africa
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HE Transportation and Communications
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Journal of Economic Literature Classification System: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications
Sets: Departments > International Development
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 21 Oct 2011 10:00
URL: http://eprints.lse.ac.uk/39025/

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