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Entry, exit and net job creation in Tunisia: an exploratory analysis

Author

Listed:
  • Hassan Arouri

    (National Institute of Statistics)

  • Adel Ben Youssef

    (University of Nice Sophia-Antipolis, GREDEG-CNRS)

  • Francesco Quatraro

    (University of Turin and Collegio Carlo Alberto)

Abstract

This paper analyzes the impact of small firms’ entry and exit dynamics on net job creation in Tunisia during 2000–2013. Our descriptive and exploratory econometric analyses exploit a database of the population of Tunisian firms; the results support the idea that small firms in a developing country, such as Tunisia, play a key role in the creation of new jobs. We also explore the role in these dynamics of a specific tax regulation, the régime forfaitaire, which has been designed to benefit only small firms. We find that small firms benefiting from this taxation scheme account for most of the job creation effects for this firm size group. This effect is persistent across sectors. However, despite their dynamism, small firms show very weak economic performance. Thus, this preliminary analysis suggests that small firms in Tunisia have a strong social impact in the form of new job creation, but a weak economic impact in terms of wealth creation. A possible interpretation of these findings and one which requires further investigation, is that small firms’ entry rates are driven mostly by necessity entrepreneurs, while the skilled workforce, which currently is largely unemployed, does not contribute to this process through the creation of innovative start-ups.

Suggested Citation

  • Hassan Arouri & Adel Ben Youssef & Francesco Quatraro, 2016. "Entry, exit and net job creation in Tunisia: an exploratory analysis," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 323-337, December.
  • Handle: RePEc:spr:eurasi:v:6:y:2016:i:3:d:10.1007_s40821-016-0064-2
    DOI: 10.1007/s40821-016-0064-2
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    References listed on IDEAS

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    Cited by:

    1. Oznur Ozdamar & Eleftherios Giovanis & Sahizer Samuk, 2020. "State business relations and the dynamics of job flows in Egypt and Turkey," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(4), pages 519-558, December.
    2. Hayet Saadaoui, 2022. "The influence of emotions on trust: An experimental investigation among potential entrepreneurs in Tunisia," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 2737-2747, October.
    3. Marco Vivarelli, 2016. "Editorial note," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 269-271, December.
    4. Marcio,Cruz & Baghdadi,Leila & Arouri,Hassen, 2020. "The Dynamics of High-Growth Firms : Evidence from Tunisia," Policy Research Working Paper Series 9145, The World Bank.
    5. 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.
    6. Erik Lehmann & Stefano Paleari & Enrico Santarelli & Silvio Vismara, 2018. "Editorial note: special issue on comparative entrepreneurship," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 33-35, March.

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    More about this item

    Keywords

    Tunisia; Developing countries; Industrial dynamics; Entry; Exit; Net job creation;
    All these keywords.

    JEL classification:

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

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