Abstract:

The purpose of this paper is to develop an econometric model of entrepreneurship which would enable to identify the factors that influence transitions into self-employment at the regional level in Tunisia.

The particular contribution of this paper is to combine regional and individual characteristics and analyze if entrepreneurship in the region affects entry into self-employment.

A particular attention is paid to individual background, such as gender, age, education, motivation, with effects depending on the regional context in Tunisia such as entrepreneurial human capital and labour force characteristics. Even though some of these factors have been the subject of several entrepreneurship studies, it is still difficult to identify which one impact significantly the decision to create a new enterprise.

As an illustration, the model is estimated using a data provided by the National Tunisian Global Entrepreneurship Monitor 2010 Project, based on the analysis of a sample of 1966 cases.

The main findings of the study show that “knowing someone personally who started a business in the past 2 years” and “presence of good opportunities for starting a business” increase significantly the probability to create a new venture. In addition, we have found that the interaction between these two factors has a positive influence. However, “fear of failure” influences negatively the decision to start up. Finally, some fixed region-specific factors notably the average real wage of a region must be accounted for when estimating regional self-employment relationships.

We discuss the implications of our results for policy-makers with useful information in designing and implementing policies to promote enterprise development.