Foreign ownership and total factors productivity in developing economies: some insights in Tunisia

This paper aims at exploring the evolution of total factor productivity and its drivers based on Tunisian manufacturing firms during the 1997- 2007 period by using panel data methods. We find that large firms are more productive than small ones, totally exporting firms are more productive than partially exporting firms, the productivity of majority foreign-owned and fully foreign-controlled firms are higher than minority foreign-owned and majority foreign-owned ones respectively. Likewise, the relationship between productivity and trade variables is not very significant. Therefore, policy-makers should encourage and further liberalize foreign participation, encourage the creation of large projects, and support small ones.