The Microeconomic Impact of Political Instability: Firm-Level Evidence from Tunisia

Type Working Paper
Title The Microeconomic Impact of Political Instability: Firm-Level Evidence from Tunisia
Author(s)
Publication (Day/Month/Year) 2016
URL http://erf.org.eg/wp-content/uploads/2017/03/Mic_ERF23AC_SamerMatta.pdf
Abstract
This paper explores the impact of political instability on firms. The context of this paper is
Tunisia, a country that saw a surge in political instability events after the 2011 Jasmine
revolution. Using a newly available dataset, we show that political instability was a major
concern for smaller and exporting firms as well as those that were operating in the tourism
sector, that have suffered from acts of vandalism or arson and that were located in the Interior
region of Tunisia. Most importantly, we find strong evidence that political instability was the
most damaging constraint to firm growth in Tunisia after the Arab Spring.

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