Regional Growth in Tunisia: Economic Geography Forces and Industrial Structure

Zouhour Karray () and Slim Driss
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Zouhour Karray: Faculté des Sciences Economiques et de Gestion de Nabeul (FSEGN), University of 7th November at Carthage, Tunis

No 419, Working Papers from Economic Research Forum

Abstract: The purpose of this paper is to explain regional growth and agglomeration of industrial activities in Tunisia between 2000 and 2005. Based on the contributions of the new economic geography, and the theoretical approach dealing with the relationship between externalities and regional growth, an econometric model is considered to test the impacts of the industrial structure, the agglomeration effects and the opening of the border in Tunisia on regional growth. On the one hand, the results show that a competitive environment and a diversity of the industrial activities are favorable to the regional growth. On the other hand, the forces of agglomeration play an important part, but do not prevent the appearance of convergence between the regions (even if overall coastal areas always benefit from a more considerable growth than the interior of the country). Lastly, the results also show that foreign direct investments play an important part in the development of concentrated areas. These findings have some policy implications related mainly to technological spillovers associated to foreign investments.

Pages: 20
Date: 2008-01-06, Revised 2008-01-06
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Published by The Economic Research Forum (ERF)

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