Growth of Micro, Small and Medium enterprises (MSMEs) in MENA countries: constraints and success factors

Rim Ben Ayed Mouelhi and Monia Ghazali

This study attempts to contribute to a better understanding of the main constraints/ boosters for MSME growth in selected countries of the MENA region (Tunisia, Egypt, Morocco and Jordan). A multinomial logit model is used to investigate the impact of a three-fold classification of firm growth determinants (company characteristics, manager characteristics and business environment characteristics). The Database is provided by the World Bank Enterprise Surveys (MENA ES). Results give statistically robust evidence that innovative firms are more likely to grow. Therefore, the implementation of efficient and well governed systems of innovation is a priority in MENA region.

Mixed market structure, competition and market size- How does product mix respond?

Aya Elewa

Assuming a double heterogeneity; within industry firm heterogeneity and within firm product heterogeneity, this paper investigates how multi-product firms respond to tougher competition and greater market size across destinations. Building a theoretical model where monopolistically competitive and oligopolistic firms coexist in the same market, the paper studies how an increase in market size affects both types of firms’ behavior. The model shows that the final impact of bigger market size on the product-mix of multiproduct firms depends on the level of fixed entry costs. For low level of entry costs, big firms increase their product-mix when they export to larger markets as they benefit from scope economies. Yet, when fixed costs are prohibitive, a larger market induces firms to skew their export sales toward their core product. Very strong confirmation of this non-monotonic effect of market size was found for Egyptian exporters across export market destinations.

Do Institutions Matter for Informal Employment in Jordan, Egypt and Tunisia?

Asmaa Ezzat, Hanan Nazier, Racha Ramadan

The paper sheds light on the role of institutions, in addition to values and individual characteristics on the likelihood of being informally employed in Jordan, Egypt and Tunisia.  Using the Labour Market Panel Surveys of the three countries, in addition to the World Value Survey and the World Governance Indicators, we examine determinants of informal employment. Our results show education and values play an important role in the decision to be  informally employed. Moreover, institutions matter in the informality decision.

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