Band 11, Heft 1 -

Low female labor force participation (FLFP) rate in Iran, at the time that women’s education has been rising and their fertility rates have been falling, has remained a puzzle. By estimating elasticities of participation and hours with respect to wages (the extensive and intensive margins), this paper tries to shed some light on this puzzle. Using a structural estimation and controlling for selection, it depicts that the elasticity of women’s participation in the labor force with respect to wages is quite large, especially for married women. Based on this, one may argue that women’s participation is very sensitive to wages. But this is not consistent with the stylized facts about FLFP in Iran. The plausible implication of such elasticities, however, is that non-participating women have potential wages close to the wages of those who participate. Therefore, lower potential wages cannot be the factor that strongly dissuades women from participation. Instead, anticipated factors, such as labor market institutions and preferences, could be the underlying force hindering women from participation. The low FLFP rate can be explained better in light of these findings. The implications for policy and research are discussed.

The purpose of this paper is to investigate the impact of foreign ownership on the production efficiency of firms listed on the Amman Stock Exchange using hand-collected, firm-level data. Arab countries have been performing poorly in attracting foreign direct investment (FDI) inflows in comparison to other developing countries, and hence, they may be missing out on growth and development opportunities. Jordan, however, has been one of the most successful Arab countries in attracting FDI inflows relative to its economic size. Therefore, Jordan offers an ideal setting to examine the benefits of foreign ownership in the region. However, this study fails to find evidence supporting the notion that foreign ownership enhances production efficiency. This finding calls into question the economic viability of investment incentives designed to attract foreign investors.

This study estimates the cost (technical) efficiency of the banking system in Occupied Palestinian Territory (OPT), using a panel of 18 banks during the period 2000–2009. Estimates have been obtained using the stochastic frontier approach. The analyses were extended to cover bank ownership (foreign and local), type (Islamic and commercial) and bank size. Results indicate that the overall cost (technical) efficiency of banks in the OPT is declining during the period of research. The mean of cost and technical efficiency was found to deteriorate through the years. Cost efficiency declined from 0.730 in 2000 to 0.666 in 2009, while technical efficiency declined from 0.733 to 0.713 during the same period. Moreover, the lower allocative efficiency (incorrect input mix rather than utilization or wasting resources) is the main cause of the decline in cost efficiency over the period of analysis. In addition, large banks have lower cost efficiency, which indicates the presence of diseconomies of scale for banks in OPT.

What determines the choice of auditors in the MENA region? This paper uses the data from Morocco, Egypt, Saudi Arabia, United Arab Emirates, Jordan, Kuwait and Bahrain and shows that the extent of agency problems in a firm dictates what sort of auditors are chosen by a firm. Our results show that high dividend payout ratios are negatively related to the appointment of one of the big-four auditors. High payout ratios are synonymous to low agency problems and thus firms feel lesser need for having one of the big-four auditors. We also show that high ownership concentration – a proxy for high agency problem – is positively related to firm’s decision of having one of the big-four auditors. High ownership concentration exacerbates agency problems between insiders and outsiders and thus induces firms to appoint one of the big-four auditors to mitigate agency problems. We also document that increased operational complexity and transactional complexity leads to hiring of one of the big-four auditors by a firm. We argue that complexity hinders investor’s ability to understand firm’s information and thus introduces agency problems. Being aware of agency problems, firms hire one of the big-four auditors to alleviate some of these problems.