Journal of Economic Cooperation and Development, Vol. 35 No. 1
Date: 09 April 2014

Five papers make up this issue. The first one, titled Assessment of Trade Performance of OIC African Members in the Face of Global Economic Crisis by S. Evans Osabuohien and R. Uchenna Efobi indicates that the 2007/2008 global economic crisis has threatened the economic and financial fabrics of most countries. For instance, FDI inflow as a percentage of GDP in Sub-Saharan Africa (SSA), which increased by over 85% (1995-1999) reduced by 48% in 2008. Similarly, merchandize exports as a percentage of GDP for SSA reduced by 17.9% between 1995 and 2008. This paper investigates the impact of the economic crisis on the trade performance of 25 selected Organisation of Islamic Cooperation (OIC) countries in Africa. Some indicators that formed our main explained variable include trade share in world market, trade per capita, and real growth in trade. In the analysis conducted in this work, we found that trade performance and global economic crises indicators differ markedly across Africa’s five sub-regions and the ‘heat’ of the global economic crises has a significant implication for trade share of Africa’s OIC members. Other findings and suggestions on how to improve the trade performance for African countries especially the OIC members are documented in the study.

The second paper, titled The Sources of Transition Probabilities in Turkish Labour Market: An Empirical Evidence for Overlapping Individual Data, 2007- 2008 by Gülser Pınar Yılmaz Ekşi, Yılmaz Akdi and Afşin Şahin, analyses the state transition probabilities in labour market that has become one of the indicators for evaluating the labour market efficiency. The state transition plays an important role in terms of acquiring knowledge and determination of basic factors in labour market. In this paper, the state transition probabilities are computed by the means of Markov process from the same periods of two year individual panel data, the Turkish quarterly data for 2007 and 2008, which is robust concerning the attrition problem that is mentioned in the literature. As a following stage, multinominal logistic regression model is employed to take the possible dynamics of transition probabilities into account such as: age, gender, urban-rural distinction, education, employment status and occupation. The results indicate that the Turkish labour market have been affected negatively during the global financial and economic crisis.

The third paper, titled Revenue Efficiency and Returns to Scale in Islamic Banks: Empirical Evidence from Malaysia by Fadzlan Sufian, Fakarudin Kamarudin and Nor Halida Haziaton Mohd Noor, provides new empirical evidence on the revenue efficiency and returns to scale in the Malaysian Islamic banking sector. The sample comprised of 17 domestic and foreign Islamic banks during the period of 2006 to 2010. We employ the Data Envelopment Analysis (DEA) method to compute the revenue efficiency levels. The results indicate that the domestic Islamic banks have exhibited lower revenue efficiency levels compared to their foreign bank peers. In essence, revenue efficiency seems to be the main factor influencing domestic and foreign Islamic banks’ profit efficiency levels. The empirical findings indicate that the large domestic Islamic banks tend to operate at constant returns to scale (CRS) or decreasing returns to scale (DRS). On the other hand, the small foreign Islamic banks tend to operate at CRS or increasing returns to scale (IRS).

The fourth paper, titled Empirical Findings on Triplet Deficits Hypothesis: The Case of Turkey by Ali Şen, Mehmet Şentürk, Canan Sancar and Yusuf Ekrem Akbaş, investigates the concept of triplet deficits in Turkey between 1980 and 2010. “Dolado-Lütkepohl Granger Causality Analysis” was performed in order to determine the direction of the relationship among the variables. In addition, the Vector Autoregressive (VAR), Variance Decomposition and Impulse-Response analysis were performed to determine the degree to which variables affected each other. The study finds that triplet deficit hypothesis was valid in Turkey between 1980 and 2010.

The last and fifth paper, titled What Prevents Firms from Access to Finance? A Case Study of OIC Countries by Majid Kermani and Elvin Afandi, inspects micro survey data from a sample of over 13,000 firms from 30 OIC countries. The data is used to address two primary questions: (a) what are the firm-level and country-specific predictors of financing obstacles in the OIC countries, and (b) how similar are those determinants across the least developed countries (LDCs) and developing OIC countries. It is found that the number and firm-specific characteristics that predict financing obstacles are more diverse in the LDCs when compared with the developing OIC countries. Age, size, sectoral origin, export status and ownership status of firms appear to be the most significant determinants of access to finance for firms in LDCs while only a few of these determinants are found to be statistically significant for developing OIC countries when compared to LDCs. The results also suggest that country-level indicators which measure financial infrastructure and economic development are strongly associated with obstacles to financing for firms in both groups of countries.

Abstract articles of the Journal of Economic Cooperation and Development, Vol.35 No.1 (2014)