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Overcapacities in the Tunisian tourism industry

Philippe Adair and Ali Abdallah
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Ali Abdallah: Institute for Microelectronics and Microsensors - JKU

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Abstract: We provide an overview of the Tunisian tourism industry on the long run, wherein investment has been on rise since the early 1990s and is obviously facing overcapacities. We document the trend of the fundamentals of tourism industry in terms of ongoing supply, harsh competition and lagging market share. We examine its performance as regards low receipts, declining value added and the lack of employment absorbing capacity. Investment overcapacities are fuelled by lax financing triggering non-performing loans and large regulation incentives. We suggest a tentative explanation of path dependency from the supply side in terms of rent-seeking behaviour of private entrepreneurs and we emphasize long-lasting State capture and the grip of cronyism.

Keywords: diminishing returns; investment overcapacities; rent seeking; State capture; Tunisia (search for similar items in EconPapers)
Date: 2015
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Published in 14th MEEA Conference, 2015, Hammamet, Tunisia

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