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Assessing the Performance of Offshore Firms in Tunisia

Author

Listed:
  • Baghdadi, Leila

    (Tunis Business School)

  • Kheder, Sonia Ben

    (Tunis Higher School of Economics and Trade (ESSECT))

  • Arouri, Hassen

    (National Centre for Statistics and Information, Sultanate of Oman)

Abstract

This paper examines the performance of offshore firms in Tunisia for the period 2002~2014. Using firm-level data, we analyze the impact of offshoring on turnover, productivity, wages and firm survival. Overall, offshore firms perform better with respect to all of these indicators. However, in the specific case of offshore firms that export and import at the same time, called two-way offshoring, performance is weaker across the board compared to their onshore counterparts. Lower productivity of offshore firms engaged in both exporting and importing suggests that these firms are low performers and that they self-select the offshore regime to reduce their fixed costs associated with exporting. The survival analysis highlights an increased probability that these types of firms will exit the market once tariffs and tax exemption privileges end, usually after 10 years. Thus, incentives provided in the Tunisian Investment Code are primarily attracting firms in the lower rungs of global value chains.

Suggested Citation

  • Baghdadi, Leila & Kheder, Sonia Ben & Arouri, Hassen, 2019. "Assessing the Performance of Offshore Firms in Tunisia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 34(2), pages 280-307.
    • Handle: RePEc:ris:integr:0771
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    Cited by:

    1. Marcio Cruz & Leila Baghdadi & Hassen Arouri, 2022. "High growth firms and trade linkages: Imports do matter," Small Business Economics, Springer, vol. 59(1), pages 79-92, June.

    More about this item

    Keywords

    Exports; Fiscal incentives; Productivity; Multinational firms; Tunisia;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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