The Impact of Risk Management on Countries in the MENA Region

Rim Jalloul () and Mahfuzul Haque
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Rim Jalloul: Laboratory for Studies and Research in Management Sciences (LERSG), Faculty of Legal, Economic and Social Sciences Agdal, Mohammed V University, Rabat 10000, Morocco
Mahfuzul Haque: Scott College of Business, Indiana State University, Terre Haute, IN 47809, USA

JRFM, 2025, vol. 18, issue 5, 1-13

Abstract: This study explores how adjustments in risk management can influence the future financial performance of 20 countries in the MENA (Middle East and North Africa) region. While the existing literature has explored risk factors in emerging economies, this research provides novel empirical evidence on how risk management practices influence long-term financial stability and growth, a dimension underexplored in the MENA context. Using a Panel Vector Autoregression (PVAR) model, we analyze data from 2005 to 2021 to quantify the dynamic relationship between risk mitigation strategies and key financial outcomes, accounting for regional volatility and cross-country heterogeneity. This methodology allows for the examination of the impact of risk management on future financial outcomes, considering both current uncertainties and strategic approaches to mitigating risks. The results reveal that robust forward-looking risk management practices significantly impact the future financial performance and resilience of the countries in the MENA region. Our findings highlight that a well-designed risk management strategy is crucial for averting financial crises and supporting long-term economic growth and sustainability of nations. This study contributes to the understanding of how strategic risk management can drive future economic and financial stability in the MENA region, providing unique insights into the role of forward-thinking risk practices in shaping national success.

Keywords: financial performance; risk management; MENA countries; Panel Vector Autoregression (PVAR); sustainable economic growth (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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