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The Determinants of Young Firms Growth in Tunisia

Hassan Arouri (), Adel Ben Youssef, Francesco Quatraro () and Marco Vivarelli ()
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Hassan Arouri: National Institute of Statistics Tunisia

No 11400, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: Tunisia; Gibrat's law; young firms; firm's growth (search for similar items in EconPapers)
JEL-codes: O12 L26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-tra
Date: 2018-03
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Forthcoming in: Small Business Economics

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