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The Determinants of Young Firms Growth in Tunisia

Author

Listed:
  • Arouri, Hassan

    (National Institute of Statistics Tunisia)

  • Youssef, Adel Ben

    (Université Côte d’Azur)

  • Quatraro, Francesco

    (University of Nice Sophia-Antipolis)

  • Vivarelli, Marco

    (Università Cattolica del Sacro Cuore)

Abstract

The aim of this paper is to investigate the growth dynamics of young small firms (in contrast with larger and older incumbents) in a developing country context, using a unique and comprehensive dataset of non-agricultural Tunisian companies. Our results suggest that significant differences between young and mature firms can be found as far as the drivers of their growth are concerned. The key finding being that − while consistently with the extant literature Gibrat's law is overall rejected − the negative impact of the initial size is significantly larger for young than mature firms. This result has interesting policy implications: since smaller young firms are particularly conducive to employment generation, they can be considered good candidate for targeted accompanying policies addressed to sustain their post-entry growth.

Suggested Citation

  • Arouri, Hassan & Youssef, Adel Ben & Quatraro, Francesco & Vivarelli, Marco, 2018. "The Determinants of Young Firms Growth in Tunisia," IZA Discussion Papers 11400, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11400
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    References listed on IDEAS

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    3. Kahsay Gerezihar Tsaedu & Zhihong Chen, 2021. "The Dynamics of Firm Growth in Sub-Saharan Africa: Evidence from Ethiopian Manufacturing Sector 1996–2017," Journal of Industry, Competition and Trade, Springer, vol. 21(3), pages 367-392, September.

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    More about this item

    Keywords

    Tunisia; Gibrat's law; young firms; firm's growth;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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