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.

Do Environment Regulations Matter for EU-MENA Trade?

Myriam Ramzy, Chahir Zaki

This study examines the impact of environmental regulation stringency on agricultural trade between the European Union (EU) and Middle East and North Africa (MENA countries). Using a gravity model and applying the Zero Inflated Poisson (ZIP) model, we estimate the impact of environmental regulation stringency on bilateral agricultural exports between 28 EU and 20 MENA countries during the period 2001-2014. The results have showed that environmental regulations do matter for agricultural trade between both regions because, in the presence of excessive zero trade observations, they act as significant fixed export costs that affect the probability of trade. More stringent environmental regulations stimulate innovative efforts in cost-saving green technologies, which increase productivity and positively affect agricultural exports. The results have favoured the revisionist Porter Hypothesis (PH), according to which environmental regulations may stimulate innovative efforts, which mitigate the negative effects of higher fixed abatement costs and enhance trade competitiveness.

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