Empirical Investigation on Roots and Process of Industrial Development in North African Countries

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This study empirically investigates productivity and technical efficiency of traditional industries in North Africa such as olive oil manufacturing firms in Tunisia and textile firms in Egypt. By using the collected data, stochastic production function and inefficiency effects model were estimated, and the major determinants that contribute to enhance efficiency were identified. Results indicated that the level of technology of equipment, skill level and experience of the employees, years of operation of the firm, supplying stable inputs, and the introduction of quality control standard have a significant effect on the improvement of technical efficiency. These results implied that the accumulation of skills, knowledge and experience were major determinants, and the contribution of tacit knowledge in knowledge management might be significant in the traditional industries in North Africa.