Employee Training and Firm Productivity in MENA Economies: Evidence from Propensity Score Matching

Improving firm productivity remains a critical challenge for developing economies, particularly within the Middle East and North Africa (MENA) region. This paper evaluates the causal impact of employee training programs on firm productivity, utilizing data from the World Bank Enterprise Surveys (2020) for five MENA countries: Morocco, Egypt, Lebanon, Tunisia, and Jordan. To account for potential self-selection bias, the study employs Propensity Score Matching (PSM). The empirical findings indicate that training exerts a substantial positive influence on productivity in Morocco (33.1%), Egypt (24.0%), Lebanon (26.2%), and Tunisia (26.2%). In contrast, while the estimated effect in Jordan is positive (16.4%), it lacks statistical significance, suggesting that training effectiveness is subject to heterogeneity across diverse institutional and sectoral landscapes. These results underscore that investment in human capital is a pivotal driver of firm-level competitiveness in developing markets. Furthermore, the findings highlight the necessity of context-specific factors in shaping the returns on training. From a policy perspective, the research advocates for the design of industry-specific and sector-sensitive training frameworks, particularly for small and medium-sized enterprises (SMEs). Promoting lifelong skill acquisition and implementing systematic appraisal mechanisms for training interventions will be essential for MENA countries to enhance firm performance, operational flexibility, and long-term economic sustainability in an increasingly competitive global environment.