The Business Environment And Moroccan Firm Productivity

The paper focuses on the role of the business environment in understanding differences in the performance of Moroccan firms. The authors use both the Moroccan Annual Census (1997-2004) and detailed surveys conducted by the World Bank (FACS and ICA). The business environment is captured by measures which include the investment climate in which firms operate, i.e. access to credit, regulatory and institutional environment and infrastructure. Firm-level performance is measured by Total Factor Productivity (TFP), which is estimated using both the classic technique of Olley & Pakes (1996), and a more recent approach suggested by Ackerberg et al. (2007). By using several strategies they address the problem of potential endogeneity between business indicators and firm performance.