Local Employment Growth in the Coastal Area of Tunisia: A Dynamic Spatial Panel Approach

Abstract Since the mid-1980s, Tunisia has conducted a structural adjustment program characterized by more privatization and economic opening. This transition has created unequal growth in the economic performance and the employment opportunities between coastal and interior regions (inland areas). The January 14th revolution has started as a reaction against unequal economical and employment opportunities. In this study, we seek to answer the following key question: why does employment grow in one region and not in other? We attempt to assess the impact of institutional factors and industrial structures on location choices of manufacturing activities, which crucially affects local employment growth. We focus on the interaction between agglomeration forces and government policies to analyze the local employment growth. Using panel data on five manufacturing sectors associated with 138 Tunisian coastal small localities along six years (2002-2007), we will give some empirical evidence on regional employment growth. We use a dynamic spatial panel data model in order to consider the spatial and temporal effects in the analysis of local employment growth. Our results show that high -tech industries spillovers have a range of 15 km against 50 km for low-tech industries. Agglomeration and education have positive effect on local manufacturing employment growth. Competition has a negative effect in the short term, but a positive one on the long run. Arabic Abstract: