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Productivity Growth And Competition In Tunisian Manufacturing Firms

Author

Listed:
  • Fethi AMRI

    (University of Gafsa)

  • Rim MOUELHI

    (Université de La Manouba)

Abstract

This paper aims at measuring the impact of competition on productivity growth of the Tunisian manufacturing sector at the firm level. To investi-gate the impact of competition on productivity we use two procedures. The first one is a two-step procedure; the second one is a one step procedure. We test the robustness of our results to different methodology and to different measures of competition both at the firm level and at the industry level. We use firm data over the period 1997-2002 from Tunisian manufacturing sector, a developing country that has experienced significant liberalization reforms since 1986 to examine the possible impact of competition on TFP. We also use industry-level data over the period 1983-2007 to explore the competition process in Tunisian manufacturing sector. Our results suggest that, at low competition level, more competition raises TFP at the firm level. Competition policies provide sufficient incentives to increase productivity growth at firm level. Yet, with high levels of competition, a rise in competition has a negative impact on productivity, the Schumpeterian effect appears and the capacity of firm to innovate decreases. Policies that promoted competition could be appropriate. But, to gain from competition, even at a high level of competition, Tunisian authorities must sustain firms to be more innovative.

Suggested Citation

  • Fethi AMRI & Rim MOUELHI, 2013. "Productivity Growth And Competition In Tunisian Manufacturing Firms," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 37-64.
  • Handle: RePEc:tou:journl:v:37:y:2013:p:37-64
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    References listed on IDEAS

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    More about this item

    Keywords

    COMPETITION; PRODUCTIVITY; MARKET SHARE; PRICE-COST MARGIN; TUNISIAN MANUFACTURING; DYNAMIC PANEL DATA MODEL; GMM METHOD;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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