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Essay / Integration between the regional economy and...
As described by (Dogruel and Karahasan), there is a growing interest in the integration between the regional economy and international trade. With the contributions of new economic geography, different dimensions of evident regional variation in economic activity and economic growth have been explained based on the importance of location and in terms of geographic proximity. Thus, the framework demonstrates the fact that identifying the main motivations or obstacles of regions affecting in one way or another the decisions of productive units has become an important issue, as explained by (Dogruel and Karahasan). As Dogruel and Karahasan point out, the MENA region is made up of economies with diverse policy preferences. A set of models were built and estimated to explore the differentiation of the business environment in the MENA region. The results show that world GDP growth, MENA GDP growth, world export volume growth and MENA trade volume growth do not have a substantial effect on the growth of industrial added value in MENA countries. On the other hand, as (Dogruel and Karahasan) continue, the coefficients of growth of national exports and variation of domestic consumption were present in all models. As (Dogruel and Karahasan) emphasize financial development, which refers to the variation in the money supply. shows no sign of importance while credit taken into account by the private sector is considered one of the most crucial determinants of improving the business environment. At the same time, the inflation rate, which was not taken as an explanatory variable in the financial development indicators due to possible multicollinearity problems, shows signs of instability in industrial value added (Dogruel and Karahasan). And, in order to be able to control the effect of the oil, two different models were recognized. Although oil reserves do not have a significant effect on changes in the business environment, an increase in fuel exports would have a significant effect on the business sector. (Dogruel and Karahasan) conclude by explaining that domestic and external demands, openness, financial deepening, regional and global trends, as well as oil production and reserves are factors that would significantly affect the environment of business. The calculated static and dynamic panel data models show that domestic and external demand is the most important reason for the current positive progress of the business environment. The results also demonstrated that inflation reduces the progress of the business sector..