Testing the productivity bias hypothesis in Middle East countries

Abstract

Purpose - The purpose of this paper is to empirically test the validity of the productivity bias hypothesis (PBH) in 18 Middle East countries. Design/methodology/approach - The paper employs autoregressive-distributed lag approach to cointegration approach and stability tests. Findings - The empirical results suggest the existence of the PBH only in the case of Bahrain, Kuwait and Saudi Arabia. Practical implications - Conclusions drawn from this research could be useful for the policy-makers of governments and practitioners in international trade organizations. Originality/value - This study extends the existing literature by providing initial empirical time series evidence of the PBH for the entire Middle East countries.