The aim of this paper is to investigate the growth dynamics of young
small firms (in contrast with larger and older incumbents) in a
developing country context, using a unique and comprehensive dataset of
non-agricultural Tunisian companies. Our results suggest that
significant differences between young and mature firms can be found as
far as the drivers of their growth are concerned. The key finding being
that - while consistently with the extant literature Gibrat's law is
overall rejected - the negative impact of the initial size is
significantly larger for young than mature firms. This result has
interesting policy implications: since smaller young firms are
particularly conducive to employment generation, they can be considered
good candidates for targeted accompanying policies addressed to sustain
their post-entry growth.
Key words: firm's growth, young firms, Gibrat's law, Tunisia.
JEL codes: O12, L26