The Impact of Credit Risk, Administrative Corruption, and Spatial-Institutional Effects on Industrial Competitiveness of Middle Eastern Countries

Document Type : applicative

Author

Assistant Professor of Economics, Faculty of Management, Economics and Accounting, University of Hormozgan, Bandar Abbas, Iran..

10.30473/jier.2025.74695.1496

Abstract

Industrial competitiveness, as one of the key pillars of economic development, plays a decisive role in enabling countries to effectively participate in global markets. This study employs the spatial dynamic panel (SDP) approach to examine the simultaneous impact of credit risk, corruption, and institutional conditions on industrial competitiveness in 14 Middle Eastern countries over the period 2000–2023. The findings of the research indicate that corruption and credit risk have a significant and negative impact on the industrial competitiveness index and the spatial-institutional effects matrix methodically delineates three discrete institutional clusters within the region; Furthermore, spatial modeling substantiates that institutional spillover effects on industrial competitiveness in the Middle East are considerably more pronounced than spillover effects emanating from trade relations or geographical proximity. Enhancing industrial competitiveness in the Middle East necessitates an integrated approach that concurrently addresses corruption, reduces credit risks, and fortifies governance institutions with a focus on regional collaboration. Spatial-institutional spillover effects have rendered enhancing competitiveness a collective challenge, particularly in countries with deficient governance structures.

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Journal of Industrial Economics researches
Volume 8, Issue 30
February 2026
Pages 41-58

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History

  • Receive Date: 25 May 2025
  • Revise Date: 09 June 2025
  • Accept Date: 16 June 2025

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