The differences in productivity between foreign-controlled firms and domestic firms can be explained by differences in size and technical efficiency. Indeed, foreign firms are assumed to exploit economies of scale in a more optimal way. But also the differences in productivity between the two types of firms can be more explained by differences in technical efficiency, whether individual specific advantages allow foreign firms to achieve greater production levels for given inputs. Estimation of production functions are performed with unbalanced panel data of Tunisian firms observed during the period 1997-2007 using the system GMM (generalized method of moments) estimator. Empirical evidence i
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