Performance ,technical progress and investment in tunisian manufacturing firms : Evidence from firm -level panel data :

Abstract EN

In order to contribute to the understanding of some of the microeconomic forces driving overall growth performance in Tunisia, this paper aims to develop an econometric analysis of firm penormance determinants.

For this purpose, and unlike the conventional methods where the analysis of firm performance has been done using conventional financial ratios, frontier methodology is adopted to measure firm performance relative to best practice frontiers consisting of other firms in the industry.

Such measures summarize firm performance in a single statistic that controls for differences among firms in a sophisticated multidimensional framework that has its roots in economic theory.

A panel of 265 firms in manufacturing industry, drawn from the Annual Firm Survey carried out by the National Statistics Institute of Tunisia (1984-1994), with detailed information on output and input factors and firm ownership is used to estimate a translog stochastic production function for the period 1984-94.

By adopting the time-varying inefficiency model developed by Battese and Coelli (1995), the paper seeks to identify the determinants of technical inefficiency for each of the six manufacturing sectors.

This study also enables the examination of industry-level total factor productivity performance, and to investigate the relationship between technical efficiency change, openness and firm investment decision.