Assessing the Performance of Offshore Firms in Tunisia

Leila Baghdadi, Sonia Ben Kheder () and Hassen Arouri ()
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Sonia Ben Kheder: Tunis Higher School of Economics and Trade (ESSECT), Postal: BADEM Lab and World Trade Organization Chair, Tunis Business School, Université de Tunis, BP 65, Bir El Kassaa 2059, Tunisia, Ben Arous, Tunisia
Hassen Arouri: National Centre for Statistics and Information, Sultanate of Oman, Postal: National Centre for Statistics and Information, Sultanate of Oman

Journal of Economic Integration, 2019, vol. 34, issue 2, 280-307

Abstract: This paper examines the performance of offshore firms in Tunisia for the period 2002~2014. Using firm-level data, we analyze the impact of offshoring on turnover, productivity, wages and firm survival. Overall, offshore firms perform better with respect to all of these indicators. However, in the specific case of offshore firms that export and import at the same time, called two-way offshoring, performance is weaker across the board compared to their onshore counterparts. Lower productivity of offshore firms engaged in both exporting and importing suggests that these firms are low performers and that they self-select the offshore regime to reduce their fixed costs associated with exporting. The survival analysis highlights an increased probability that these types of firms will exit the market once tariffs and tax exemption privileges end, usually after 10 years. Thus, incentives provided in the Tunisian Investment Code are primarily attracting firms in the lower rungs of global value chains.

Keywords: Exports; Fiscal incentives; Productivity; Multinational firms; Tunisia (search for similar items in EconPapers)
JEL-codes: F14 F23 L52 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0771

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