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2007 AEC - FDI Contribution to Technical Efficiency in the Tunisian Manufacturing Sector: A Combined Empirical Approach

15-Nov-2007

This paper investigates the contribution of FDI to firms' technical efficiency by applying two empirical methodologies over a same sample of firms. Using a panel data for 674 firms belonging to the Tunisian manufacturing sector and observed over the period 1997-2001, we show statistically and econometrically that the robustness of FDI spillover effects is affected by the empirical methodology adopted. On the basis of a decomposition of TFP growth, our results show also that when spillover effects could be confirmed, they are for a large proportion of firms counterbalanced by internal technical inefficiency. This last result confirms the idea that FDI contribution to technical efficiency relies mainly on firm’s internal organizational and absorptive capacities.

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