16

The aim of this article, is to analyze the effects of factors external and internal to the firms on innovation in Tunisia, and how these effects vary according some specificities of the firms, such as the opening of capital to foreign companies. The analysis is based on a sample of 543 manufacturing firms, taken from the Tunisian Survey of Technological Innovation conducted in 2005 by the Tunisian Ministry of Scientific Research, Technology and Skills Development. The results indicate that the firm’s technological competences, derived from in-house R&D and innovation efforts and cooperation are the main determinants of innovation performance of Tunisian firms. They also suggest that firms with high export intensity and significant foreign capital participation are found to be less innovating than partially exporting firms with low foreign capital share. The preliminary conclusion of our study is a set of recommendations to policy makers aiming at targeting new strategy vis-à-vis FDI considering their technological content and their impact on in house R&D, innovation and training system.JEL Codes: C25, O14, O31