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What Factors Influence Firm Perceptions of Labour Market Constraints to Growth in the MENA Region?

Ali Fakih () and Pascal Ghazalian

No 9404, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. This paper aims at examining the implications of firm characteristics, national locations, and sectoral associations for the perceptions of firms concerning two basic labour market constraints: labour regulations and labour skill shortages. The empirical analysis is carried out using firm-level dataset sourced from the World Bank's Enterprise Surveys database. A bivariate probit estimator is used to account for potential correlations between the errors in the two labour market constraints' equations. We implement overall estimations and comparative cross-country and cross-sector analyses, and use alternative estimation models. The empirical results reveal some important implications of firm characteristics (e.g., firm size, labour compositions) for firm perceptions of labour regulations and labour skill shortages. They also delineate important cross-country and cross-sector variations. We also find significant heterogeneity in the factors' implications for the perceptions of firms belonging to different sectors and located in different MENA countries. This paper provides policy-makers with information needed in the design of labour policies that attenuate the impacts of labour market constraints and enhance the performance of firms and the long-run economic growth.

Keywords: labour market constraints; labour skill shortages; labour regulations; bivariate probit model; MENA region (search for similar items in EconPapers)
JEL-codes: J20 K20 K31 O53 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015-10
New Economics Papers: this item is included in nep-ara
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Published in: International Journal of Manpower, 2015, 36 (8), 1181-1206

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Journal Article: What factors influence firm perceptions of labour market constraints to growth in the MENA region? (2015) Downloads
Working Paper: What Factors Influence Firm Perceptions of Labour Market Constraints to Growth in the MENA Region? (2015) Downloads
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