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(23)

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(24)

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(25)

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(26)

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(27)

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(28)

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(29)

Nuxjpdq/ S1 U1 +4<<4,1 Lqfuhdvlqj Uhwxuqv dqg Hfrqrplf Jhrjudsk|1/ M1 Srolw1 Hfrq1/ <<+6,=7;6<<1

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Uhylhz ri Hfrqrplf Vwxglhv/ 93=864751

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Wkrpsvrq/ I1 +5337,/ Lqgxvwu| Lqwhudfwlrq/ Nqrzohgjh Vslooryhuv dqg Hpsor|phqw Jurzwk lq Prurffdq Pdqxidfwxulqj1 +xqsxeolvkhg PSklo wkhvlv,1

W|erxw/ M1 U1 +5333,1 Pdqxidfwxulqj Ilupv lq Ghyhorslqj Frxqwulhv= Krz Zhoo Gr Wkh| Gr dqg Zk|B/ Mrxuqdo ri Hfrqrplf Olwhudwxuh/ 6;+4,=44771

(30)

Table 1. Descriptive statistics

Number (all values in '000 of 1974 Dirhams)

Maximum Minimum Sd. dev. Median Mean of obs.

Variables available for all years

3658655 0 46812 587 5845 98121 Production 379039 0 3618 92 663 98107 Wage bill 7416 0 164 16 60 98149 Permanent workers 7813 0 100 0 13 98154

Casual workers (in full employment equivalent)

8011 0 208 18 73 98149 Total employment 37133% 0% 170% 17% 28% 98101

Share of wages in the value of production

346227 0 2958 0 306 98154 Investment 5591335 0 25115 112 1264 98148 Disbursed capital

Variables available only for 2001

33100000 0 502672 167 17219 6145

Book value of machinery and equipment (gross)

13600000 0 194501 66 6363 5871

Book value of machinery and equipment (net)

59200000 0 824950 276 26289 6238

Book value of all assets (gross)

38000000 0 501713 130 13000 6010

(31)

Table 2. Agglomeration variables (figures weighted by the number of firms in each commune) Number Maximum Minimum St. dev. Median Mean of obs. A. By commune (1998-2001) 15478 1 2521 343 1411 22240

Sectoral employment in the location

59219 1 12291 6261 10290 22240

Total employment in the location

76 1 16 11 17 22240

Sectoral number of firms in the location

14 1 4 13 11 22240

Number of sectors in the location

34.24 1.00 6.88 4.48 7.16 22240 Competitivity index 9.78 1.00 2.31 3.85 4.37 22240 Diversity index 21863 0 3218 280 1771 22240

Proximity variable (see text for details)

B. By city (1994-2001) 24378 1 4423 1051 3217 39845

103629 1 29962 18788 28125 39845

163 1 39 22 39 39845

14 1 3 14 13 39845

Proximity variable (see text for details)

C. By province (1985-2001) 24378 1 4512 1651 3612 86058

116381 2 33285 19606 33621 86058

200 1 46 30 47 86058

14 1 2 14 13 86058

(32)

Table 3. Predictive equation for capital stock t-stat. Coef. Firm characteristics 4.10 0.408

Age of firm (log)

-3.45 -0.069

Age of firm (log squared)

3.41 0.002

Share of capital held by foreigners

0.16 0.001

Share of capital held by government

8.11 0.367

Limited liability (sole proprietor omitted categ

9.16 0.590 Corporation Instruments 17.19 0.355

Lagged labor (log)

-2.17 -0.267

Lagged share of casual workers

37.68 0.508

Disbursed equity (log)

-11.62 -0.886

Firm existed in previous year (yes=1)

15.16 0.201 Investment (log) 6.23 0.377 No investment (no=1) 3.34 0.049

Lagged investment (log)

0.63 0.043

No lagged investment (no=1)

yes Sectoral dummies yes Regional dummies 4.34 1.544 Intercept 6106 Number of observations 0.666 R-squared

(33)

Table 4. Production function regressions (the dependent variable is the log of output)

Provinces Cities Communes 1985-2001 1994-2001 1998-2001 t-stat Coef. t-stat Coef. t-stat Coef. Firm-specific variables 44.34 0.173 27.33 0.169 15.76 0.134

Predicted capital stock (log)

49.20 1.187 31.29 1.572 15.09 1.361

Firm age (log)

-43.49 -0.278 -25.96 -0.381 -11.62 -0.351

Log of firm age squared

109.71 0.570 58.70 0.480 36.07 0.396 Manpower (log) -22.68 -0.388 -13.29 -0.342 -6.68 -0.230

Share of casual workers

Agglomeration variables (all variables in logs)

-4.99 -0.052 -2.46 -0.044 0.15 0.002

Lit (total employment) 1 1.69 0.014 -2.68 -0.033 -2.61 -0.029

Lijt (sectoral employment) 2 -0.68 -0.010 1.13 0.025 0.72 0.016

Nijt (number of firms in sector) 3 4.10 0.037 0.56 0.007 1.26 0.020

Cijt (competition index) 4 1.66 0.058 1.71 0.082 -0.57 -0.017

Mit (number of sectors) 5 0.62 0.010 -0.05 -0.001 1.15 0.023

Dit (diversity index) 6 0.89 0.002 1.19 0.003 0.88 0.003 Intercept 0.075 0.060 0.051 sigma_u 0.578 0.506 0.426 sigma_e 0.017 0.014 0.014 rho 84970 38784 21641 Nobs

(34)

Table 5. Instrumenting equation for labor Provinces Cities Communes 1985-2001 1994-2001 1998-2001 t-stat Coef. t-stat Coef. t-stat Coef. Instruments 23.19 0.162 6.80 0.074 -5.99 -0.091

Lagged labor (log)

5.36 0.072 0.65 0.014 0.43 0.013

0.98 0.009 -0.89 -0.013 -2.43 -0.047

-25.23 -0.474 -7.44 -0.225 5.03 0.210

1.61 0.006 -0.11 -0.001 -2.65 -0.021 Investment (log) -4.96 -0.048 -2.14 -0.031 -4.31 -0.084 No investment (no=1) 2.99 0.005 2.75 0.007 0.00 -0.000

-2.94 -0.021 -0.72 -0.007 -0.96 -0.014

No lagged investment (no=1) Exogenous variables 4.02 0.072 3.62 0.098 4.39 0.161

29.78 0.590 17.28 0.785 8.88 0.740

Firm age (log)

-27.53 -0.124 -16.49 -0.179 -7.84 -0.166

52.23 2.049 28.37 1.919 17.16 1.790 Intercept 1.088 1.239 1.419 sigma_u 0.432 0.394 0.359 sigma_e 0.864 0.908 0.940 rho p-value F statistic p-value F statistic p-value F statistic 0.00 375.860 0.00 36.940 0.00 11.960

Joint significance test of instruments

84970 38784

21641 Nobs

(35)

Table 6. Instrumenting equation for share of casual labor Provinces Cities Communes 1985-2001 1994-2001 1998-2001 t-stat Coef. t-stat Coef. t-stat Coef. Instruments 0.91 0.002 1.67 0.006 0.45 0.002

Lagged labor (log)

40.87 0.166 2.43 0.016 -12.75 -0.120

-2.73 -0.008 0.15 0.001 -0.46 -0.003

-1.25 -0.007 -1.37 -0.013 1.00 0.013

-1.63 -0.002 -0.03 -0.000 -0.96 -0.002 Investment (log) -1.24 -0.004 -0.44 -0.002 -1.71 -0.010 No investment (no=1) -0.84 -0.000 0.10 0.000 -1.47 -0.002

-0.80 -0.002 -1.30 -0.004 -2.17 -0.010

No lagged investment (no=1) Exogenous variables 2.78 0.015 0.06 0.001 0.54 0.006

3.26 0.019 4.86 0.069 3.21 0.083

Firm age (log)

-7.02 -0.010 -9.27 -0.032 -5.68 -0.037

3.77 0.045 5.37 0.114 3.10 0.100 Intercept 0.142 0.179 0.185 sigma_u 0.130 0.124 0.111 sigma_e 0.543 0.677 0.734 rho p-value F statistic p-value F statistic p-value F statistic 0.00 278.880 0.00 3.670 0.00 25.510

Joint significance test of instruments

84970 38784

21641 Nobs

(36)

Table 7. Productivity regressions with instrumented labor (the dependent variable is the log of output)

34.13 1.000 12.31 1.011 9.87 1.304

Firm age (log)

-32.54 -0.241 -7.66 -0.242 -7.97 -0.306

31.29 0.939 10.03 1.174 1.88 0.240 Manpower (log) ** -9.18 -1.060 -0.02 -0.024 3.59 1.024

Share of casual workers **

Agglomeration variables (all variables in logs)

-5.77 -0.064 -1.65 -0.031 0.01 0.000

Lit (total employment)

17.53 0.152 7.61 0.095 5.64 0.063

Lijt (sectoral employment)

-12.72 -0.202 -6.70 -0.152 -5.83 -0.127

Nijt (number of firms in sector)

12.89 0.122 5.95 0.082 5.59 0.089

Cijt (competition index)

2.25 0.083 0.63 0.031 -1.05 -0.032

Mit (number of sectors)

1.35 0.023 0.75 0.021 1.18 0.025

Dit (diversity index)

1.24 0.003 1.63 0.004 1.00 0.003 Intercept 0.081 0.064 0.054 sigma_u 0.614 0.526 0.438 sigma_e 0.017 0.015 0.015 rho 84970 38784 21641 Number of observations **: instrumented

(37)

Table 8 Production function regressions, labor instrumented and agglomeration variables lagged (the dependent variable is the log of output)

6.75 0.279 6.35 0.689 7.93 1.483

Firm age (log)

-11.19 -0.108 -4.90 -0.192 -7.87 -0.452

40.80 1.521 9.15 1.341 2.16 0.369 Manpower (log) ** -12.91 -1.581 0.30 0.426 1.42 0.514

Agglomeration variables (all variables lagged one year and in logs)

-4.42 -0.044 -1.19 -0.021 -1.20 -0.022

6.98 0.063 1.02 0.015 0.83 0.014

-3.90 -0.064 -0.66 -0.017 1.06 0.036

4.42 0.044 -0.78 -0.013 -1.86 -0.045

2.71 0.094 1.94 0.091 1.18 0.056

2.83 0.049 -0.92 -0.028 0.07 0.002

9.17 0.021 4.86 0.017 3.53 0.022 Intercept 0.083 0.072 0.081 sigma_u 0.587 0.518 0.445 sigma_e 0.019 0.019 0.032 rho 68998 27582 13034 Nobs **: instrumented

(38)

Table 9. Production function, including neighboring effects (the dependent variable is the log of output; labor is instrumented)

6.34 0.263 6.32 0.685 7.92 1.482

Firm age (log)

-10.34 -0.101 -4.87 -0.190 -7.87 -0.452

40.82 1.522 9.17 1.344 2.15 0.367 Manpower (log) ** -12.93 -1.584 0.27 0.380 1.47 0.531

Agglomeration variables (all variables lagged one year and in logs)

-4.80 -0.048 -1.28 -0.022 -1.40 -0.026

7.05 0.064 1.01 0.014 0.91 0.016

-3.90 -0.064 -0.65 -0.017 0.90 0.031

4.64 0.046 -0.75 -0.012 -1.80 -0.043

2.75 0.096 1.86 0.088 1.41 0.067

2.95 0.051 -0.85 -0.026 0.02 0.001

Neighboring effects (lagged one year and in logs)

-4.37 -0.014 -2.10 -0.014 -2.40 -0.033 Vijt (employment/distance) 9.05 0.021 4.80 0.017 3.55 0.022 Intercept 0.083 0.071 0.081 sigma_u 0.587 0.518 0.445 sigma_e 0.019 0.019 0.032 rho 68942 27582 13034 Nobs **: instrumented

(39)

Table 10. Wage effects Provinces Cities Communes 1985-2001 1994-2001 1998-2001 t-stat Coef. t-stat Coef. t-stat Coef.

Agglomeration variables (in logs)

2.08 0.017 -2.45 -0.037 -0.28 -0.003

-16.63 -0.109 -17.83 -0.179 -18.02 -0.171

12.36 0.149 12.27 0.225 12.70 0.236

-3.86 -0.028 -6.06 -0.068 -6.74 -0.091

4.28 0.119 1.63 0.066 1.87 0.049

-0.33 -0.004 1.36 0.031 -1.39 -0.025

Dit (diversity index) Neighboring effects (in logs)

17.83 0.044 3.66 0.018 -2.64 -0.020 Vijt (employment/distance) -0.01 -0.000 0.00 0.000 0.01 0.000 Intercept 0.092 0.076 0.047 sigma_u 0.469 0.433 0.378 sigma_e 0.037 0.030 0.015 rho 85992 39827 22230 Nobs

(40)

justment in firm location and size) Provinces Cities Communes 1985-2001 1994-2001 1998-2001 via via via total via wages productivity total via wages productivity total via wages productivity -45.9% -2.3% -43.6% -17.9% 5.6% -23.6% -29.6% 0.5% -30.1%

87.2% 17.3% 69.9% 48.5% 31.2% 17.4% 50.0% 30.6% 19.4%

-62.7% -15.9% -46.8% -37.6% -24.9% -12.7% -2.6% -24.8% 22.1%

32.2% 2.6% 29.6% -1.5% 6.3% -7.8% -17.7% 7.8% -25.4%

12.4% -2.7% 15.2% 18.0% -2.2% 20.2% 21.4% -2.5% 23.9%

16.2% 0.2% 16.1% -10.6% -1.5% -9.1% 1.6% 1.3% 0.3%

-9.2% -2.8% -6.3% -7.4% -1.1% -6.3% -13.1% 1.3% -14.4% Vijt (employment/distance) -2.4% 2.0% -0.1% -12.1% -4.0% -2.5% -8.0% -2.0% -1.6%