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Exchange rate movements and manufacturing employment in Tunisia: Do different categories of firms react similarly?

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  • Mourad Zmami
  • Ousama Ben-Salha

Abstract

Based on a micro-level dataset composed of 548 firms operating in Tunisian manufacturing industries, we examine the effects of exchange rates on employment over the period 1997–2002. The estimation of a dynamic employment equation using the system GMM technique suggests that employment positively responds to the depreciation of effective exchange rates and bilateral exchange rates vis-à-vis the Euro and the US dollar. Moreover, the different elasticities of employment to exchange rates vary according to specific characteristics of firms such as the ownership structure, the international exposure, the size and the industries to which they belong. Finally, using different measures of volatility, we confirm that the exchange rate volatility significantly lowers the employment level in all categories of firms. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Mourad Zmami & Ousama Ben-Salha, 2015. "Exchange rate movements and manufacturing employment in Tunisia: Do different categories of firms react similarly?," Economic Change and Restructuring, Springer, vol. 48(2), pages 137-167, May.
    • Handle: RePEc:kap:ecopln:v:48:y:2015:i:2:p:137-167
    DOI: 10.1007/s10644-015-9158-6
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    Cited by:

    1. Thorsten Janus, 2020. "Terms of trade volatility, exports, and GDP," Economic Change and Restructuring, Springer, vol. 53(1), pages 25-38, February.
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    3. Carlos A. Ibarra, 2016. "Investment, asset market, and the relative unit labor cost in Mexico," Economic Change and Restructuring, Springer, vol. 49(4), pages 339-364, November.
    4. Mohsen Bahmani-Oskooee & Ilir Miteza & Altin Tanku, 2020. "Exchange rate changes and money demand in Albania: a nonlinear ARDL analysis," Economic Change and Restructuring, Springer, vol. 53(4), pages 619-633, November.
    5. Mourad Zmami & Ousama Ben-Salha, 2015. "The adjustment of plant-level investment to exchange rate fluctuations in Tunisia: do the size and the ownership structure matter?," Economics Bulletin, AccessEcon, vol. 35(4), pages 2487-2505.
    6. Hussaini Umaru & Aguda Niyi A. & Nordiana Osagie Davies, 2018. "The Effects of Exchange Rate Volatility on Economic Growth of West African English-Speaking Countries," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(4), pages 131-143, October.
    7. Mohsen Bahmani-Oskooee & Ridha Nouira, 2020. "On the impact of exchange rate volatility on Tunisia’s trade with 16 partners: an asymmetry analysis," Economic Change and Restructuring, Springer, vol. 53(3), pages 357-378, August.

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    More about this item

    Keywords

    Employment; System GMM; Exchange rate; Tunisia; F31; E24; C23;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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