An Analysis of the Business Climate and the Investment Intentions Trend in Post-revolutionary Tunisia

Source:
By:Marouen Hadhri

DOI: https://doi.org/10.30564/jbar.v4i1.2600

Abstract:

The paper examined the impact of business climate on the investment intentions of local enterprises, Mediterranean enterprises, and individual entrepreneurs in Tunisia. The paper has used both primary and secondary data. The secondary data is used for literature review and primary data has been collected by survey in Tunisia. Primary data were collected from 257 local and 204 Mediterranean businesses, including Large Corporations, Small businesses and SMEs, and 362 individual Tunisian investors, using a structured questionnaire via face-to-face interviews. Principal Component Analysis, t-test, ANOVA, post-hoc test, and the model of Multinomial Logistic Regression Analysis has been carried out to study the interrelationships among the variables in this paper. A descriptive analysis of the data has also been done. The paper found that the most important economic variables for local and Mediterranean enterprises are the “presence of support system” and “Investment Grants”. Though for the Individual Investors the most important economic variables are “Saturation of Market”, “Investment grants”, and “Data Access”. The social variables “safety in daily activities, safety while traveling” and “security level of governance” are the most important variables. Further, the most important political variables affecting investment decisions are “Good governance” and “Law enforcement” of local, Mediterranean enterprises, and individual investors. The paper also found that political dimensions have a significant impact on the investment intentions of local enterprises, while social dimensions have a significant impact on the investment intentions of Mediterranean enterprises. Moreover, economic dimensions have a significant impact on the investment decision of individual investors. The paper suggests that, by developing a favorable climate for businesses, the government should promote investment in Tunisia. Easy credit facilities should be provided to the entrepreneurs. There is a need to provide credit guarantee tools to small and medium-sized businesses for easy access to financial services.

References:

[1]Alon, I., Herbert, T. T. A stranger in a strange land: Micro political risk and the multinational firm. Business Horizons, 2009, 52(2): 127-137. [2] Bechri, Mohamed & Najah, Tijani, Nugent, Jeffrey B. Tunisia’s Lending Program to SMEs: Anatomy of an Institutional Failure? Small Business Economics, Springer, 2001,17(4): 293-308. [3] EIB. Tunisia: Neighborhood SME financing. European Investment Bank, 2015. [4] Franco, M., Haase, H., Lautenschläger, A. Students’ Entrepreneurial Intentions: An Inter-Regional Comparison. Education+Training, 2010, 52(4): 260-275. [5] GEDI. Global Entrepreneurship and Development Institute-GEDI, 2017. [6] Hamada J., Haugerudbraaten H., Hickman A., et Khaykin I. Country and Political Risk. Practical Insights for Global Finance, Sam Wilkin, Risk Books, 2004. [7] ILO. Employment Policy Convention, 1964 (No. 122) - Tunisia (Ratification: 1966), 2016: https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:13101:0::NO::P13101_COMMENT_ ID:3242582 [8]Mansouri,Faysal. Challenges in Accessing Finance for Growth-Oriented Small and Micro Entrepreneurs in Tunisia, 2011. Available at: http://www.oecd.org/mena/competitiveness/47252691.pdf [9]Sequeira, J.M. Muller, S., McGee, J.E. The Influence of Social Ties and Self-efficacy in Forming Entrepreneurial intentions and Motivating Nascent Behavior. Journal of Developmental Entrepreneurship, 2007, 12(3): 275-293. [10]U.S. Department of State. 2019 Investment Climate Statement Tunisia, 2019. Available at https://www.state.gov/reports/2019-investment-climate-statements/tunisia/ [11]World Bank. Investment Climate Assessment: Enterprises’ Perception in Post Revolution Tunisia. Washington, DC. © World Bank, 2014. https://openknowledge.worldbank.org/handle/10986/19323; License: CC BY 3.0 IGO. [12]World Bank. The Regulatory Environment for Private Sector Investment, 2017. Available at: http://pubdocs.worldbank.org/en/413431500382259730/ the-unfinished-revolution-eng-chap4.pdf [13]World Bank. Tunisia Innovative Startups and SMEs Project (P167380), 2019. [14]Karasmanaki Evangelia et. Al. An Investigation of Factors Affecting the Willingness to Invest in Renewables among Environmental Students: A logistics Regression Approch, Sustainability, 2019. [15]Cooray, A. Factors Affecting Investments and Business confidence with Special Regard to political Stability in Sri Lanka, 2003. [16]Alleyene, Broome. An exploratory study of factors influencing investment decisions of potential investors, Central Bank of Barbados Working Paper, 2010. [17] Yosra Mefteh Rekik, Younes Boujelbene. Determinants of Individual Investors’Behaviors: Evidence from Tunisian Stock Market. IOSR Journal of Business and Management (IOSR-JBM), 2013, 8(2): 109-119. E-ISSN: 2278-487X