Working Papers
The Nexus between Construction Investment and Economic Development: Evidence from MENA Countries
No.
1476
Publisher
ERF
Date
August, 2021
Topic
L7. Industry Studies: Primary Products and Construction
C3. Multiple or Simultaneous Equation Models
O1. Economic Development
We aim at scrutinizing the relationship between construction investments and economic development for 10 greatest economies in the Middle East and North Africa (MENA) region, namely, Saudi Arabia, Turkey, Iran, United Arab Emirates, Egypt, Iraq, Qatar, Algeria, Kuwait, and Morocco, between 1970 and 2018. By employing second generation panel data modelling tools, we find that there is an inverted U-shaped pattern implying that the share of construction investments started to decline at some point in time as the economic growth reached a certain threshold. We argue that MENA countries should reconsider their construction-induced growth policies and incorporate alternative options supported by innovative and environmental-friendly technologies to attach much more importance to the role of construction in future economic development plans.
Research Fellows
Hasan Murat Ertuğrul
Department of Economics, FEAS, Anadolu University
Authors
Burak Pirgaip
Department of Business Administration, Hacettepe University