The impact of financial crises on industrial growth in the Middle East and North Africa

Using country-industry panel data between 1980 until 2019, I estimate the causal effects of financial crises, with total impact given by the sum of a direct effect on all industries and an external finance dependence channel. Currency crises have the worst impact of all types of crises across all countries. Financial crises of all types are substantially worse for the MENA economies. For MENA, there is a manufacturing growth reduction of 2.8 %, 6 % and 1.2 % during banking, currency and sovereign debt crises. There is substantial heterogeneity across the MENA, with Morocco, Iraq and Israel experiencing a much stronger impact from all types of financial crises.