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#1568 - Exploring the Relationship between Micro-Enterprises and Regional Development: Evidence from Tunisia

IRE Vol 15: Issue 4, 2017 - Special Issue , Pages 465-488

Author(s): Faten Gazzah (University of Caen, France, and University of Sousse, Tunisia), Jean Bonnet (University of Caen, France) and Sana El Harbi (University of Jeddah, Kingdom of Saudi Arabia)

Abstract:
We investigate the relationship between the presence of micro-enterprises and regional development, as measured by a validated index of regional development, at the level of Tunisian delegations (small-scaled regions). Applying spatial measures and spatial econometric techniques on a data set of 262 delegations, our results show that in disadvantaged areas, a higher micro-enterprise presence is positively related to regional development. However, in relatively higher developed areas of Tunisia, micro-enterprises appear to play only a marginal role in regional development. In general, our results emphasise the importance of attracting large, capital-intensive firms in efficiency-driven economies like Tunisia. Our results also show the important and positive role that micro-enterprises can play in regions where large, capital-intensive firms are absent.

JEL Classification: L26, R11, C21

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