"High growth firms and trade linkages: Imports do matter", published in Small Business Economics

Tunisia - 20 September 2021

Trade topics: SMEs, Trade Policy

This paper examines the association between high-growth firm status and global linkages with special focus on the role of imports. We rely on a rich panel data covering all formal firms in Tunisia between 1999 and 2015. Our results show that firms that import, export, have foreigner ownership, or benefit from offshore regimes are more likely to achieve high-growth status compared to other similar firms in terms of size, age, sector, and region. Among these channels, importing status has a robust positive association with high growth. We find that an increase in the import barriers led by changes in non-tariff measures reduces the likelihood of achieving high-growth status through import channel for firms that are in sectors facing relatively higher levels of exposure to the shock.