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Creative Destruction and Policy Reforms : Changing Productivity Effects of Firm Turnoverin Moroccan Manufacturing

ACCOUNTING AGGLOMERATION EFFECTS AGGREGATE FLUCTUATIONS AGGREGATE PERFORMANCE AGGREGATE PRODUCTIVITY AGGREGATE PRODUCTIVITY GROWTH ALLOCATIVE EFFICIENCY AVERAGE PRODUCTIVITY BARRIERS TO ENTRY BASE YEAR BOOK VALUE BUSINESS CLIMATE BUSINESS CYCLE BUSINESS REGULATION BUSINESSES CASUAL WORKER CASUAL WORKERS COMMERCE COMPARATIVE ANALYSIS COMPETITIVE ADVANTAGE COMPETITIVE PRESSURES COMPETITIVENESS COMPETITORS CORPORATION CREATIVE DESTRUCTION DEFLATORS DEVELOPMENT ECONOMICS DRIVERS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC OUTLOOK EMPLOYMENT ENTREPRENEURSHIP ENTRY RATE EQUIPMENT EXPORT LED GROWTH EXPORTS EXTERNALITIES FIRM DYNAMICS FIRM ENTRY FIRM EXIT FIRM LEVEL FIRM PERFORMANCE FIRM PRODUCTIVITY FIRM SURVEY FIRM TURNOVER FOREIGN OWNERSHIP FREE PRESS FUNCTIONAL FORMS GDP GDP DEFLATOR GROWTH RATE INDUSTRIAL STRUCTURE INDUSTRY CHARACTERISTICS INDUSTRY PRODUCTIVITY INEFFICIENCY INTERNATIONAL MARKETS INTERNATIONALIZATION JOB CREATION JOB DESTRUCTION JOB LOSS LABOR MARKETS LABOR PRODUCTIVITY LABOUR LABOUR PRODUCTIVITY LARGE ENTERPRISES LESS DEVELOPED COUNTRIES LOCAL INDUSTRY LONG-RUN EFFECTS MACROECONOMIC ANALYSIS MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMICS MANUFACTURERS MANUFACTURING ENTERPRISES MANUFACTURING ESTABLISHMENTS MARKET SHARE MARKET SHARES MISSING VALUES MOTIVATION NET ENTRY COMPONENT NET ENTRY EFFECT NET JOB CREATION OUTPUTS PREVIOUS STUDIES PRIVATE SECTOR PRODUCTION FUNCTION PRODUCTIVE FIRMS PRODUCTIVITY PRODUCTIVITY COMPONENTS PRODUCTIVITY DECOMPOSITION PRODUCTIVITY DECOMPOSITIONS PRODUCTIVITY DISTRIBUTION PRODUCTIVITY EFFECTS PRODUCTIVITY GROWTH PRODUCTIVITY IMPROVEMENTS PRODUCTIVITY INCREASES PRODUCTIVITY LEVELS PRODUCTIVITY REGRESSION PRODUCTIVITY REGRESSIONS PROPERTY RIGHTS PROPRIETORSHIP PUBLIC ENTERPRISES RECESSIONARY PERIODS REGRESSION ANALYSIS REGULATORY REFORMS RESULT RESULTS SEES SMALL MANUFACTURING STATE OWNED COMPANIES STRUCTURAL CHANGE TELECOMMUNICATIONS TEMPORARY WORKERS TIME PERIOD TIME PERIODS TOTAL EMPLOYMENT TOTAL FACTOR PRODUCTIVITY TOTAL WORKERS TRADE LIBERALIZATION UNDERESTIMATES VALUE ADDED WAGES WEB WORKER
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Middle East and North Africa | Morocco
2012-03-19T19:13:08Z | 2012-03-19T19:13:08Z | 2009-10-01

How important is firm turnover to national productivity growth? The literature points to the contribution of creative destruction being strongest in more developed countries or where market institutions are strongest. This paper looks at the case of Morocco, spanning 16 years, during which reform initiatives aiming to strengthen market forces were introduced. The paper argues that it is important to take into account i) the timing of how decompositions are structured (capturing the effects of high growth among young firms as part of the benefit of increased entry) and ii) the additional indirect impacts of firm dynamics on agglomeration externalities and competition. The paper shows there are striking differences in the productivity paths of entering and exiting firms compared with incumbents, and that restricting the time horizon of productivity decompositions to the actual year of entry or exit underestimates the productivity effects of turnover. Although it has been hypothesized that conducting decompositions over longer horizons would increase the positive contribution of net turnover, this is not the case in Morocco as losses from exiting firms rise too. Nor has the net contribution of turnover increased with market reforms; if anything, the contribution has declined over time. But the allocation of resources has improved. Both technical and allocative efficiency have risen since the mid-1990s. The paper also shows that firm turnover affects productivity through additional channels. It is closely correlated with measures of agglomeration that are associated with higher rates of exit among unproductive firms, and turnover itself is positively associated with subsequent productivity growth of incumbents.

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