FDI Contribution to Technical Efficiency in the Tunisian Manufacturing Sector

This paper investigates the contribution of FDI to firms' technical efficiency by applying two empirical methodologies over the 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 TFP growth decomposition, our results also show 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 the firm’s internal organizational and absorptive capacities.