Heterogeneous Growth Effects in MENA Countries: Evidence from Pooled Quantile Regression

This study examines the heterogeneous effects of key macroeconomic determinants on economic growth in selected MENA economies using a pooled quantile regression framework. Unlike conventional mean-based approaches, this method captures variation across different segments of the conditional growth distribution. Using annual data for eight MENA economies over the period 2000–2023, the analysis evaluates how foreign aid, budget deficits, foreign direct investment, and trade openness are associated with growth under different economic conditions. The results reveal that foreign aid and fiscal deficits are more strongly associated with growth at lower quantiles, indicating greater relevance during low-growth episodes, while their effects weaken or become insignificant at higher quantiles. In contrast, foreign direct investment shows a stronger and more consistent positive association at higher quantiles, whereas trade openness is mainly significant at the lower end of the growth distribution. These findings provide distribution-sensitive evidence on growth determinants in structurally diverse MENA economies. From a policy perspective, the results suggest that macroeconomic strategies should be tailored to country-specific growth conditions rather than relying on uniform policy frameworks across the region.