Narrow Your Choices

Refine By Topic

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Middle East and Central Asia > Saudi Arabia

You are looking at 1 - 4 of 4 items for :

  • Type: Journal Issue x
  • Competition x
Clear All Modify Search
Cover IMF Working Papers
Market Power in the Middle East
Yevgeniya Korniyenko
,
Ahmed K Tohamy
, and
Weining Xin
The Middle East (ME) is often perceived as region with rentier economies and uncompetitive markets. Evidence of market power in the region however is scant. In this paper, we ask the following three questions: Is the ME uniquely uncompetitive? Has the evolution of market power in the region traced the global rise in market power? What government policies and actions influenced the market power in the region and can taxes be a way to even the playing field? To answer these questions, we utilize comprehensive firm-level data from Compustat between 2004 and 2022 and employ two methods for estimating markups (production function and cost-share approach). We document that market power among listed firms in the ME is higher than in the US, but on a downward trend. We find that the value-added tax (VAT) reforms introduced by some Gulf states from 2018 to 2022 resulted in a reduction of market power, an additional benefit beyond increasing fiscal space. While policymakers should continue to use available regulatory levers to achieve economic efficiency and a level playing field, VAT could be considered as an alternative instrument.
Keywords:
Middle East; Market Power; Markup; Firm Behavior; market power in the Middle East; markups estimate; sample representativeness; markups in GCC country; markups dynamics; Value-added tax; Competition; Inflation; Oil sector; Global
Cover IMF Working Papers
The Role of Market Structure and Timing in Determining VAT Pass-Through
Mr. Matthieu Bellon
We examine the role of market characteristics and timing in explaining observed heterogeneity in VAT pass-through. We first extend existing theory to characterize the roles of imperfect competition and product differentiation, then investigate these relationships empirically using a panel of 14 Eurozone countries between 1999 and 2013. We find important roles for product market regulation and product quality, and little impact of advance announcement of reforms. Our findings have important implications for policy-makers considering VAT rate adjustments, by illuminating which of the consumers or the producers would experience the brunt of a reform across different settings.
Keywords:
Value added tax; Price effect; Pass through; Competition; Product Differentiation; pass-through heterogeneity; VAT pass-through; pass-through effect; baseline pass-through; elasticity coefficient; imperfect competition; pass-through adjustment; Value-added tax; Consumption; Commodity markets; Consumer prices; Europe
Cover IMF Working Papers
How Do Changing U.S. Interest Rates Affect Banks in the Gulf Cooperation Council (GCC) Countries?
Mr. Olumuyiwa S Adedeji
,
Yacoub Alatrash
, and
Mr. Divya Kirti
Given their pegged exchange rate regimes, Gulf Cooperation Council (GCC) countries usually adjust their policy rates to match shifting U.S. monetary policy. This raises the important question of how changes in U.S. monetary policy affect banks in the GCC. We use bank-level panel data, exploiting variation across banks within countries, to isolate the impact of changing U.S. interest rates on GCC banks funding costs, asset rates, and profitability. We find stronger pass-through from U.S. monetary policy to liability rates than to asset rates and bank profitability, largely reflecting funding structures. In addition, we explore the role of shifts in the quantity of bank liabilities as policy rates change and the role of large banks with relatively stable funding costs to explain these findings.
Keywords:
WP; bank; rate; liability; liability rate; GCC bank assets rate; panel data; banks scope; sensitive bank; bank level; bank assets rate; liability structure; Central bank policy rate; Deposit rates; Bank soundness; Competition; Commercial banks; Global
Cover IMF Working Papers
How Does Bank Competition Affect Solvency, Liquidity and Credit Risk? Evidence from the MENA Countries
Raja Almarzoqi
,
Samy Ben Naceur
, and
Alessandro Scopelliti
The paper analyzes the relationship between bank competition and stability, with a specific focus on the Middle East and North Africa. Price competition has a positive effect on bank liquidity, as it induces self-discipline incentives on banks for the choice of bank funding sources and for the holding of liquid assets. On the other hand, price competition may have a potentially negative impact on bank solvency and on the credit quality of the loan portfolio. More competitive banks may be less solvent if the potential increase in the equity base—due to capital adjustments—is not large enough to compensate for the reduction in bank profitability. Also, banks subject to stronger competitive pressures may have a higher rate of nonperforming loans, if the increase in the risk-taking incentives from the lender’s side overcomes the decrease in the credit risk from the borrower’s side. In both cases, country-specific policies for market entry conditions—and for bank regulation and supervision—may significantly affect the sign and the size of the relationship. The paper suggests policy reforms designed to improve market contestability and to increase the quality and independence of prudential supervision.
Keywords:
WP; bank competition; bank regulation; Solvency; Liquidity; Credit Risk; Supervision; market share; bank market power; bank risk; liquidity position; incumbent bank; bank assets; bank liquidity; bank capital ratio; bank capital; bank portfolio; decisions bank; Competition; Bank solvency; Islamic banking; Nonperforming loans; North Africa; East Africa; Middle East; Global