Recent tendency in Tunisian industrial firms’ location

Abstract

This study analyzes the regional determinants of new industrial firms’ location choices in Tunisia. After introducing neighborhood effects and spatial simultaneity into the empirical model, Estimation result consistency is assessed using data on 501 new manufacturing firms established in Tunisia’s 153 delegations between 2016 and 2019. Agglomeration variables such as sectoral specialization, sectoral competition and diversity indexes, a human capital indicator, regional amenities, and physical and information and communications technology (ICT) infrastructure indicators are recognized. Results indicate that agglomeration economies, industrial land availability and industrial adapted infrastructure provided in developed industrial zones are the main factors driving entrepreneurs’ decisions. Interior delegations are more attractive to Food and Construction industries. The knowledge-intensive sectors, Electronics and Mechanical, are attracted to internet infrastructure available in metropolis peripheries. Textile firms are more attracted to metropolitan delegations. Estimates of the spatial model components indicate that spillovers taking place between delegations (inter-delegations’ spatial effects) influence the firms’ location decisions.