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Regulatory harmonization, profits, and productivity: Firm-level evidence from Morocco

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  • Augier, Patricia
  • Cadot, Olivier
  • Dovis, Marion

Abstract

This paper combines a new database on non-tariff measures (NTMs) with Morocco's firm census to explore the effect of regulatory harmonization with the E.U. on firm-level outcomes. Exploiting cross-sectoral variation in the timing and extent of regulatory harmonization, we find that harmonization waves correlate with rises in labor productivity and with higher markups, allowing self-financing of the adaptation process at the firm level. We identify an induced market-structure change that made the observed rise in markups possible. Namely, harmonization temporarily sheltered the Moroccan market from competition from low-end producers in other developing countries, who took time to adapt. We identified this effect through changes in both trade patterns and firm-level outcomes. Thus, harmonization apparently generated a self-financing adaptation process by affecting both firm-level incentives and market structure.

Suggested Citation

  • Augier, Patricia & Cadot, Olivier & Dovis, Marion, 2017. "Regulatory harmonization, profits, and productivity: Firm-level evidence from Morocco," CEPR Discussion Papers 11799, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11799
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    Cited by:

    1. Hendrik W. Kruse & Inma Martínez-Zarzoso & Leila Baghdadi, 2017. "Standards and Market Power: Evidence from Tunisia," Working Papers 1131, Economic Research Forum, revised 08 2017.

    More about this item

    Keywords

    firms; Harmonization; Morocco; Non-Tariff Measures; productivity; Profit; Trade;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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