Self-employment in the MENA Region: Locus of Control and Macroeconomic Drivers

Abstract

This study investigates the relationship between internal locus of control (ILC), religiosity, and the likelihood of self-employment in a sample of countries from the Middle East and North Africa region. We estimate a two-level logistic regression model using data from the World Values Survey's sixth and seventh waves. The model combines individual-and country-year predictors (like GDP, bank deposits, corporate tax rate, and unemployment rate). The findings reveal multiple conclusions. First, the effect of ILC on the likelihood of self-employment across countries is positive and homogenous. Second, the impact of religiosity on self-employment is country and time dependent; it can be positive or negative, contingent on the country's macroeconomic condition. The country's economic context explains the variations in the slope of religiosity. Third, religiosity negatively moderates the relationship between ILC and self-employment. Fourth, differences in self-employment across countries are mainly driven by individual-level factors, while country-year variables account only for a small proportion of these variations.

Keywords: Self-employment, Entrepreneurship, Locus of Control, Religiosity, MENA