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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 9404

Classification and Topics

• Classification: Wirtschaft ; Demand and Supply of Labor: General ; Regulation and Business Law: General ; Labor Law ; Economywide Country Studies: Asia including Middle East
• Subject: labour regulations ; labour skill shortages ; labour market constraints ; bivariate probit model ; MENA region

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fakih, Ali ; Ghazalian, Pascal L.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/124924
• Last update: 27.05.2025, 1:42 PM CEST