Regulatory Harmonization, Profits, and Productivity: Firm-Level Evidence from Morocco

37 Pages Posted: 23 Jan 2017

See all articles by Patricia Augier

Patricia Augier

University of the Mediterranean

Olivier Cadot

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Centre for Economic Policy Research (CEPR); World Bank

Marion Dovis

Universities of Marseille - Centre d'Economie et de Finances Internationales (CEFI)

Date Written: January 2017

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.

Keywords: firms, Harmonization, Morocco, Non-Tariff Measures, productivity, Profit, Trade

JEL Classification: F13, F15

Suggested Citation

Augier, Patricia and Cadot, Olivier and Dovis, Marion, Regulatory Harmonization, Profits, and Productivity: Firm-Level Evidence from Morocco (January 2017). CEPR Discussion Paper No. DP11799, Available at SSRN: https://ssrn.com/abstract=2904321

Patricia Augier (Contact Author)

University of the Mediterranean ( email )

Centre de la Vieille Charité
Marseille, 13 002
France

Olivier Cadot

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland
+41 21 692 3463 (Phone)
+41 21 692 3495 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Marion Dovis

Universities of Marseille - Centre d'Economie et de Finances Internationales (CEFI) ( email )

Château La Farge
Route des Milles
Les Milles, F-13290
France

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