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Imperfect Competition - The impact of FTA on productivity under the oligopoly market in Morocco - 1.Intuition behind the linkage between FTA and productivity 2.Comparative analysis based on the case, i.e. FTA., entry 3.Sum up

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Intuition / Logic behind the model I - Key equations - 1. Demand Market Share (the sales-weighted): 2. Demand Market Elasticity: 3. Mark up: 4. Productivity:

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Intuition / Logic behind the model II - Graphic -

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Numerical Example: multi-lateral., with entry Percentage change in selected variables Meat products Demand mkt share -82.87 Demand mkt elastisity 1.70 Markup -1.77 Productivity 1.80 Output per firms 7.93

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Scenario I Elimination of all tariffs on non-food products Partial elimination of tariffs on food products Financial aids from EU to Morocco with $180 million per year Market share elasticityMarkup productivity # of firms -55.901.150.78-0.78-13.78

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Scenario II Tariff elimination of meat products sector leftover Financial aids from EU to Morocco with $180 million per year Market Share elasticityMarkup productivity # of firms -91.540.8%2.58-2.51-29.68

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Comparisons elasticity of sc 2 < elasticity of sc 1 But, mark-up increased more because higher % of exit occurred in sc 2. more productivity decreases in sc 2. Market share elasticityMarkup productivity # of firms SC 1-55.901.150.78-0.78-13.78 SC 2-91.540.802.58-2.51-29.68

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