Drivers of growth in Tunisia: young firms vs incumbents

H. Arouri, A.B. Youssef, F. Quatraro, M. Vivarelli*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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.

Original languageEnglish
Pages (from-to)323-340
Number of pages18
JournalSmall Business Economics
Volume54
Issue number1
DOIs
Publication statusPublished - Jan 2020
Externally publishedYes

JEL classifications

  • o12 - Microeconomic Analyses of Economic Development
  • l26 - Entrepreneurship

Keywords

  • Firm’s growth
  • Gibrat’s law
  • Tunisia
  • Young firms
  • UNITED-STATES
  • GIBRATS LAW
  • RESEARCH-AND-DEVELOPMENT
  • PERFORMANCE
  • SIZE
  • KNOWLEDGE
  • INNOVATION
  • Gibrat's law
  • ENTREPRENEURIAL FIRMS
  • Firm's growth
  • TECHNOLOGY
  • AGE

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