Determinants of Productivity in Morocco - The Role of Trade?

The aim of this paper is to explore the determinants of productivity and productivity change in the Moroccan economy, with a particular interest in examining the role of international trade in impacting upon productivity levels. Methodologically this is achieved through a twostage methodology. First we focus on productivity, and productivity change and its determinants at the micro (firm) level. In the first stage we derive estimates of firm and sectoral level productivity, and examine their evolution over time. The second stage of the work is concerned with understanding and explaining the differences in productivity across the firms/sectors, and of the role of trade liberalization. Our results suggest that changes in firm level productivity are relatively modest (in particular in the latter half of the period), and that there are quite considerable changes in aggregate productivity arising from a relatively high degree of entry and exit of firms, and from changes in the shares of incumbent firms. The results also indicate that the relationship between key variables such as import or export openness can vary importantly according to the size (class) of the firm.