Testing the productivity bias hypothesis in Middle East countries

The purpose of this paper is to empirically test the validity of the productivity bias hypothesis (PBH) in 18 Middle East countries.

The paper employs autoregressive-distributed lag approach to cointegration approach and stability tests.

The empirical results suggest the existence of the PBH only in the case of Bahrain, Kuwait and Saudi Arabia.

Conclusions drawn from this research could be useful for the policy-makers of governments and practitioners in international trade organizations.

This study extends the existing literature by providing initial empirical time series evidence of the PBH for the entire Middle East countries.