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The microeconomic impact of political instability: Firm‐level evidence from Tunisia
Author(s) -
Matta Samer,
Appleton Simon,
Bleaney Michael
Publication year - 2018
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12388
Subject(s) - political instability , context (archaeology) , politics , economics , instability , arson , constraint (computer aided design) , tourism , development economics , political science , law , mechanics , mechanical engineering , physics , engineering , paleontology , biology
This paper explores the impact of political instability on firms in the context of Tunisia, which experienced a surge in political instability events after the 2011 Jasmine revolution. Using a new dataset, we show that political instability was a major concern for small and exporting firms as well as those that were operating in the tourism sector, those that suffered from acts of vandalism or arson, and those that were located in the interior region of Tunisia. More importantly, we find strong evidence that political instability was the most damaging constraint to firm growth in Tunisia after the Arab Spring.