Are there dynamic externalities from direct foreign investment? Evidence for Morocco

DUSTRY AND ENERGY DEPARTMENT WORKING PAPER DUSTRY SERIES PAPER No. 48 re There Dynamic Externalities from irect Foreign Investment? 'idence for Moroccot" ;ernber 1991 ~~~~~~~-'.a a _~ _ a N S;AUd;,.,-tXsv .~~~* ~~~S-sa.t~7: N B I.dr p n Norld Bank Industry and Energy Deparirnent OSP  INDUSTRY AND ENERGY DEPARTMENT WORKING PAPER INDUSTRY SERIES PAPER NO. 48 Are There Dynamic Externalities from Direct Foreign Investment? Evidence for Morocco December 1991 The World Bank Industry and Energy Department, OSP  ARE THERE DYNAMIC EXTERNAUTIES FROM DIRECT FOREIGN INVESTMEN1 EVIDENCE FOR MOROCCO* Mons Haddad Tlhe World Bank Ann Harrison Harvard University and the World Bank December 1991 Abstract Many developing countris now actively solicit foreign investment, offering income tax holidays, import duty exemptions, and subsidies to foreign firms. One reason for subsidizing these firms is the positive externalities as foreign technology is transferred from foreign to domestic firms. This paper employs a unique firm-level dataset to test for such dynamic externalities in the Moroccan manufacturing sector. We find no evidence of positive externalities, although the dispersion of productivity is smaller in sectors with more foreign firms. Using detailed information on quotas and tariffs, we also reject the hypothesis that the lack of such dynamic externalities occurs because foreign investors are attracted to protected domestic sectors. Please address all correspondence to Ann Harrison, John F. Kennedy School of Government, Harvard University, 79 John F. Kennedy Street, Cambridge, Mass. 02138.  TABLE OF CONTENTS Pae No. I. INTrODUCnION II. THE REGULATORY FRAMEWORK: FOREIGN INVESTMENT AND TRADE POLICY ............ . ................ 4 III. COMPARATIVE BEHAVIOR OF DOMESTIC AND FOREIGN FIRMS ....... 7 IV. PRODUCTIV!TY DYNAMIC EXTERNALITIES .11 V. CONCLUSION AND IMPLICATION OF FINDINGS .16 TABLES: Table 1: Sharc of Foreign Direct Investment in Manufacturing .... ......... 18 Table 2: Comparison of Productivity, Outward Orientation, and Foreign-owned Enterprises in Manufacturing .19 Table 3: Comparison of Productivity, Outward Orientation, and Wages Between Majority- and Minority-owned Foreign Firms. 20 Table 4: Impact of Foreign Ownership on the Level of Firm Productivity, Defined as the Deviatioi from Sector-Level Best-Practice Performance .21 Table 5: Impact of Foreign Ownership on the Level of Productivity, by High Technology and Low Technology Sectors .21 Table 6: Testing for Externalities from Foreign Investment for the Growth of Productivity .22 Table 7: Testing for External.ties from Foreign Investment for Productivity Growth under Varying Trade Regimes .23 BIBLIOGRAPHY ........................................................ 24 APPENDIX I .25 APPENDIX 11 ....... . ................................ ................. 27  I. INTRODUCITION 1.01 The disappearance of non-equity sources of foreign capital in the 1980s has created a renewed interest in direct foreign investment (DFI). Despite the controversies surrounding the benefits and costs of DFI, a number of developing country governments have now changed their policies from restricting towards promoting foreign investment. Some countries have actually tilted the balance towards foreign firms by offering special ircentives: in Mexico, the macquiladora firms pay no income taxes; in much of the Caribbean, foreign firms receive income tax holidays, import duty exemptions, and subsidies for infrastructure. Are these subsidies justified? One benefit often cited in the literature on the gains from DFI, apart from the enhanced capital inflows and increased employment, is the positive externalities generated to domestic firms from the new technology or additional know-how brought in by foreign firms. If foreign firms introduce new products or processes to the domestic market, domestic firms may benefit from the more rapid diffusion of new technology. In some cases, the demonstration effect may be sufficient to stimulate technology diffusion. In other cases, diffusion may occur from labor turnover as domestic employees move from foreign to domestic firms. If this pcsitive externality is not completely captured by the incoming firms, it could justify some type of subsidy. This may be the rationale for government policies in economies as diverse as Taiwan and Bulgaria, which target special treatment for foreign firms in high technology sectors. 1.02 Despite the voluminous literature on DFI in the 1960s and 1970s, the empirical evidence on dynamic externalities from foreign sources of equity investment remains slim. Although a number of descriptive case studies have documented the importance of foreign investment for domestic technology development (see, for example, Rhee and Belot (1989)), few researchers have attempted to measure these effects empirically. In an early study, Caves (1974) tested for the impact of foreign presence on value-added per worker in Australian domestically-owned manufacturing sectors. Caves found that the disparity between (higher) foreign and domestic value-added disappears as the foreign share of sectoral labor rises, which is consistent with positive externalities from foreign presence.  -2- However, this relationship could also be observed if foreign firms invested more in capital- intensive sectors, leading to higher value-added per worker in foreign-dominated sectors. 1.03 Globerman (1979) replicated Caves' findings (1974) using sector-level, cross- section data for Canadian manufac*uring industries in 1972. Globerman, however, was able to control explicitly for capital intensity in his estimation of value-added per worker. The results indicate only a weak effect--none of the proxies for foreign presence in the sector are significant at the 5 percent level. These results should call into question the positive effects identified by Caves (1974), who did not control for capital intensity. 1.04 Even if no positive effects were identified in Canada or Australia, it is still possible that dynamic externalities from foreign investment do occur in industrializing countries. Most of the empirical work on dynamic externalities from foreign investment in developing countries has focused on Mexico. which gathers manufacturing data by ownership type. Blomstrom and Persson (1983) reproduce Globerman's study using 1970 census data for 215 Mexican manufacturing industries. Controlling for capital intensity, scale effects, and worker quality, Blomstrom and Persson find that labor productivity is significantly higher in sectors where foreign firms employ a higher share of the labor force. Blomstrom (1986) and Blomstrom and Wolff (1989) extend the analysis of Mexican data to examine the impact of foreign presence on the dispersion of productivity and on the growth rate of total factor productivity (TFP).' Using sector-level data, Blomstrom (1986) finds that an increase in foreign presence fails to increase productivity growth, while Blomstrom and Wolff (1989) find faster productivity growth and faster convergence ot productivity levels in sectors with higher levels of foreign ownership. 1.05 This paper. which examines the impact of foreign investment on firms in Morocco's manufacturing sector from 1985 through 1989, contributes to this existing 1/ Blomstrom ( 1989) provides a synthesis of his previous work on the impact of foreign investment in Mexico.  literature in two respects. First, this is the only study that employs data at the level of the individual firm over several years. Consequently, we are able to compare explicitlv the behavior of foreign and domestic firms by sector, controlling for firm-specific attributes such as size. The panel nature of the data (which combines cross-section and time series) allows us to go beyond cross-section analysis comparing partial productivity measures (such as labor productivity) across different firms Our results suggest that forei.,n firms exhibit higher levels of total factor productivity, but their rate of productivity growth is lower than that for domestic firms. At first glance, this would appear to support the catch-up hypothesis-- domestic firms, at lower initial levels of productivity, are able to increase efficiency at a faster rate. However, our tests on the presence of any dynamic externalities from foreign presence show that although domestic firms exhibit higher levels of productivity in sectors with a larger foreign presence, they do not exhibit higher productivity growth in those sectors. 1.06 Second, we are able to use detailed information on the level of quota and tariff protection to test whether the lack of any dynamic exterpalities stems from a tendency of foreign firms to nmove towards protected sectors. We do not find evidence of such positive externalities in either the protected or unprotected sectors. 1.07 Section 11 discusses the trade and foreign investment policies in Morocco before and during regulatory reform in the 1980s. Section III examines the relative performance of domestic firms and foreign firms. Section IV measures the positive externalities of foreign presence on the level, growth rate, and dispersion of productivity for domestically-owned firms. This section also extends the analysis to examine whether dynamic technology externalities are related to the degree of import protection. Section V concludes with a discussion of the implications of these findings for policies towards multina- tionals.  -4- II. THE REGULATORY FRAMEWORK FOREIGN INVESTMENT AND TRADE POLICY 2.01 Foreign investment policies. The first major action against foreign investment in Morocco took place in 1973, when the government passed the Morocconization Decree, which restricted foreign ownership of certain industrial, commercial, and service activities to no more than 49 percent. The main purpose of this policy was political rather than economic--to reduce the dominant role of French firms in the Moroccan economy. Activities falling under the Morocconization law included textiles, clothing, footwear, leather products, travel goods, toys, and wine. Most important, the law extended to such export-oriented branches of manufacturing as leather tanning and finishing, fish canning and preserving, fertilizers, edibie oi!s, vegztable fibers, and processed fruits and vegetables. The negative impact of this law on foreign investment is evident from the fact that even enterprises not subject to the law voluntarily handed over their capital share to their Moroccan partners. 2.02 A major reform of the investment code was undertaken in 1983. It allowed full foreign ownership of Moroccan companies in certain sectors (especially manufacturing), eased restrictions on the repatriation of capital and dividends, and introduced fiscal and other incentives for direct foreign investment. The code guaranteed (i) foreign inve-tment against the risks of nationalization and expropriation; (ii) unlimited transfer of dividends and profits to foreign investors; and (iii) the repatriation of foreign investors' capital and related capital gains. By 1985, the Moroccan majority-ownershWp restriction no longer applied to any segment in the "dustrial sector, which meant that foreign firms could have an equity participation of more than 49 percent. The investment code was further liberalized in 1988, administrative procedures governing the approval of direc. foreign investment were simpli- fied. and rules similar to those granted nonresident foreigners were extended to nonresident Moroccans.3' The following types of foreign investment became permissible without the prior authorization of the Exchange Office: partic4pation in the equit' of capital of a company being established; subscription to the capital increase of an existing  -5- 2.03 Trade policies. Following independence in 1956, Morocco's economic development strategy was primarily based on import-substituting industrialization and agricultural self-sufficiency in a highly protected domestic market. For more than two decades, trade and industrial policies in Morocco were based on high tariffs and on quantitative restrictions on imports. Furthermore, during the 1970s, the Moroccan government expanded growth through high levels of public spending, financed through foreign borrowing and rising receipts from phosphate exports. This culminaterd in a major payment crisis in 1983. As a result, the government introduced outward-orienced structural adjustment measures designed to eliminate the bias against export activities, liberalized the import regi:-n, --d enhanced the allocative role of the financial sector. 2.04 The trade reform introduced in 1983 called for the eventual elimination of the Special Import Tariff (SIT), a uniform tariff levied on the c.i.f. value of imports, the lowering of the maximum customs duty from 400 percent in 1983 to 60 percent in 1984 and 45 percent in 1985, and the reduction in quantitative restrictions. Changes in the industrial code were also undertaken to promote exports. In Januarv 1988, the SIT and the custonms stamp duty were merged into what was called a fiscal levy on imports, set at 12.5 percent. Contrary to the declining maximum tariff trend observed since 1983, the fiscal levy actually company; purchase of Moroccan securities; non-interest-bearing contributions to partnership current accounts; purchase of real property: self-financing of construction projects; creation or purchase of sole proprietorship; and operations to increase capital through the capitalization of reserves, carry-overs, reserve provisions that have become available, or the consolidation of partnership current accounts. Similarly, operations involving the transfer of investments between foreigners no longer requires the authorization from the Exchange Office. In addition. the banks were authorized to transfer to nonresident fc,reign persons, without limit as to the amount or timing, the income generated by the investments in Morocco, as well as the capital invested. For further details, see IMF (1991). In December 1989, the Morocconization Decree of 1973, which imposed a 49% limit on foreign ownership of local enterprises, was eliminated for all sectors. Limits on the share of foreign participation would, however, continue to apply in a few sectors outside of manufacturing.  -6- exceeded the sum of the two abolished taxes. This was intended to generate additional fiscal revenue rather than to provide protection. 2.05 Quantitative restrictions, the principal instrument of protection for dor.-estic goods until 1984, were progressively dismantled. Many (but not all) goods were gradually transferred from List B (imports requiring prior authorization to be imported) to List A (imports requiring no prior authorization) beginning in 1983. List C, which included all prohibited import items, was formally abolished in 1986.3' 2.06 In both its foreign investment and trade policies, Morocco took major steps towards liberalization from 1984 through 1988. These changes in policy allow us to use the relatively short time series available in the data to analyze the impact of foreign investment on domestic firms across protected and unprotezted sectors. XI Nevertheless, Morocco is still far from being an open economy. The tariff structure remains complicated despite the lowering of the maximum tariff and the dispersion of the tariff rates remains high, although significantly reduced in recent years. Morocco'; tariff structure is such that tariffs rise with the stage of processing, resulting in effective rates of protection that are considerably higher than nominal rates. This effect is reinforced by the prevalence of quantitative restrictions (List B) on product; at a higher stage of processing.  - 7 - III. COMPARATIVE BEHAVIOR OF DOMESTIC AND FOREIGN F'IRMS 3.01 Data for this paper are taken from the Moroccan manufacturing census, which annually surveys all manufacturing firms with at least 10 employees or with sales revenue exceeding 100,000 dirhams (for a description of the dataset used for this paper, see Appendix I). The share of foreign investment in manufacturing for 1985 through 1989 is shown in Table 1. Foreign investment averaged 15 percen; of total assets during the second half of the 1980s. This average hides significant differences across sectors. In 1989, for example, 35 percent of the electronics sector was foreign owned, compared to only 4 percent for basic metais. In addition, there were significant changes in foreign ownership between 1985 and 1989. The share of foreign ownership in some sectors doubled (such as in chemiicais) while in other sectors it fell by as much as 50 percent (beverages and tobacco). 3.02 Table 2 compares the relative performance of foreign and dormestically-owned firms. Foreign firms are initially defined as all firms with foreign equity that exceeds 5 percent of the firm's assets. (We will examine alternative definitions of toreign ownership later and find the results unaffected.) Relative performance is measured using the following indicators: output per worker, exports as a perccntage of total sales, real wages, deviation from overall norms in the sector for multi-factor productivity, and total factor productivity growth (TFPG). Output per woiker is derived from total value of output divided by the ratio of total value of labor remuneration to minimum wage, instead of dividing by the number of workers. This approach allows us to adjust at least partially, for a different skill composition among employees across firms. For example, if a foreign firm has very few workers but pays them much more, due to their greater skill, this wiil show up in a greater number of "efficiency" workers for that firm. Real wages are computed as the total value of remuneration to workers divided by the number of employees. The derivation of multi- factor productivity and TFPG are discussed in greaLer detail below. 3.03 Table 2 reports all performance measures using the ratio of foreign-firm performance to domestic-firm perfor-mance. In c-'.imrn 1, the value of 2.0 for food produicts  -8- shows that output per worker for foreign-owned firms was twice as high as for domestic firms. The difference in perfornwance is statistic.lly significant at the 5 percent level. The first set of figures gives relative performance using the ratio of unweighted means for domestic and foreign firms in each sector. Across all sectors, the unweighted means suggest that foreign firms exhibited higher labor productivity, paid their workers higher wages, and exported a higher share of their output as well. 3.04 One shortcoming with these unweighted averages is that they may simply reflect the superior performance of foreigni firms due to their size. Most foreign firms in Morocco tend to be large and capital intensive, leading to higher observed levels of labor productivity. Since larger firms, in general, are more likely to export a higher share of output, we are also likely to observe that foreign firms are more export oriented. On the other hand, the majority of domestically-owned firms are smaller--so they are less likely to export a high share of their output. In other words, using unweighted means leads to an inappropriate comparison of larger foreign firms with smaller domestic firms. If we re- calculate the figures in Table 2 to produce weighted means--with the weights given by total sales--this allows us to compare domestic and foreign firms of similar sizes. 3.05 'I'he weighted rneans--shown in parentheses in Table 2--reveal a different story. After controlling for firm size, foreign firms do not exhibit higher levels of labor productivity or a greater outward orientation for most sectors, although they do continue to pay higher real wages than domestically-owned firms pay. On average, foreign firms exhibited levels of labor productivity and export shares in total sales that were only 70 percent of what was achieved by domestic firms of similar size. We repeated the comparison between domestic and foreign firms by explicitly dividing the sample into different size categories, but the results did not change and, consequently, are not reported here. 3.06 One problem with using labor productivity is that it is at best a partial measure of overall multi-factor productivity--which takes into account the combined productivity of the firm when all inputs are included. How could such a measure be computed'? Using  - 9- techniques available for panel datasets (which combine data across firms and over time), Appendix II shows how it is possible to compute a firm-specific measure of multi-factor productivity within each sector. As shown in Appendix 1I, such a measure is essentially the remainder from a regression of value-added on labor and capital inputs. 3.07 The level of multi-factor productivity is usually examined relative to the level achieved by the most efficient firm in each sector j. Given N firms, there will be N estimated productivity measures within each sector j, given by &l,,.... Nj. We can now define relative efficiency for a firm i as given by zij, where (1) 6tj = max(fij) zj= - k i = 1,2 ....... N for each sector j. 3.08 A high value of z;, (in absolute value) indicates that firm i is very inefficient relative to the most efficient firm in sector j. Table 2 gives the ratio of z,, for foreign firms relative to domestic firms. A ratio less than unity indicates that foreign firms are relatively more productive than their domestic counterparts--since the deviation z,, from the best- practice firm is low. Using both the weighted and unweighted means for the zi,'s of foreign and domestic firms shows that, on average, foreign firms have achieved a higher level of productivity. 3.09 What about the growth rate of productivity? Do foreign firms also dominate in this respect? The last column in Table 2 shows the difference between total factor productivity growth (TFPG) 4 in foreign and domestic firms. TFPG is not higher among foreign firms. Nor is this particularly surprising. While we could expect foreign firms to exhibit higher levels of productivity, their rate of growth of productivity is likely to be lower, as domestic firms catch up to the higher level of productivity of their foreign counterparts. 4/ TFPG has been calculated here using the standard approach.  -10- 3.10 One question that arises is: to what extent does minority-versus-majority foreign ownership affect relative performance'? Table 3 compares the relative performance of firms whose foreign participation exceeds 50 percent to firnis with minority foreign participation--defined as from 5 to 49 percent. The results in Table 3 suggest that f -ms with majority foreign ownership generally behave in the same way as firms with mino. .y foreign ownership. Majority-owned firms do not exhibit higher levels of productivity, although they do pay their workers somewhat higher wages and are slightly more outward oriented than firms with minority foreign ownership. 3.11 In summarv, Tables 2 and 3 suggest that there are sorne differences in behavior and performance between domestically-owned and toreigni-owned firms. Although foreign firms do not geLnerallK exhibit higher levels of labor productivity or export orientation, once we control t(or size otf firm, foreign enterprises do pay higher wages and generally exhibit lower deviations tronm best-pr.actice InUlti-tactor productivity. It is interestinlg to observe thaitt the sharie ot tore ign equlitV participation does not seem to affect performance as TMlLCh: tirlls wit 1d ]ss th.al 50) percent tore-,gnl equity participation do not hehave much ditter[l lltN 1romn Iil tOrim-owned ti;[Ciri' firlls.  - 11 - IV. PRODUCTIVITY DYNAMIC EXTERNALITIES 4.01 If the knowledge or new technology embodied in foreign firms is transmitted to doinestic firms, we would expect to see evidence in the form of higher productivity levels and growth rates for domestically-owned firms in sectors with a large foreign presence. This section examines two different possibilities through which foreign presence could have a positive externalities effect on domestic firm productivity. First, we examine the influence of foreign presence on the dispersion of productivity levels, using a modified version of the 7; 's defined in (1). Second, we examine the influence of foreign presence on the growth of productivity for domestically-owned firms. 4.02 Externalities in terms of productivity levels. The productivity levels calculated earlier for each firm are only comparable across firms within the same sector, but not across different sectors. Consequently, we cannot directly measure the impact of foreign presence on the level of productivity across sectors. However, we can compare the deviation of firm productivity from each sector's best-practice frontier. To normalize these residual productivity terms requires one more step. Given N firms, there will be N estimated intercepts within each sector j, given by & ...&N. We can now define (2) di = max(&j;) 4, = (&il - &J)/ &J i = 1,2 ....... N. 4.03 Table 4 examines the impact of foreign investment (controlling for firm size) on the dispersion of productivity according to the following equation (3) 4, = f(DFI_Firm ,, DFI Sectori, SIZEij) 4.04 The Qi,'s defined above are used as the dependent variable--the deviation of firm-level productivity from the sector's best practice frontier. We include, as independent  - 12 - variables, the share of foreign assets in each firm's total assets, the share of foreign firms in the sector (as measured by firm assets), and a measure of firm size, proxied by the ratio of firm sales to total sales for the largest firm in each sector. The positive and statistically significant coefficient for the share of foreign investment in firm assets supports the earlier results (see Table 3) that suggested that foreign firms exhibit less deviation from best- practice productivity levels than do domestic firms. The positive and significant coefficient on size also suggests that larger firms are rnore likely to achieve higher levels of productivity. Finally, the sector-level foreign investment variable measures the impact of foreign presence on the deviation of productivity levels from the best-practice frontier. The positive and significant coefficient on sectoral foreign investment suggests a smaller deviation from maximum productivity levels in sectors with a large foreign presence. One reason may be that foreign firms induce greater competition. causing firms that cannot approach the best- practice frontier to exit the industry. 4.05 To determine whether the lower dispersion of firm productivity in sectors with a high foreign presence is due to increased competition or the more rapid diffusion of new technology (or both) would require a more fully specified model. Nevertheless, we can gain some insight by separatinig the sample into "high" technology and "low" technology sectors and re-estimating the equations in Table 4. We defined the high technology sectors to include machineiy, transport equipment, electronics, scientific instruments, and chemicals. 4.06 The results, which are given in Table 5, show that the influence of foreign investment in reducing the dispersion of productivity was greatest in the low technology sectors. This suggests that competition due to foreign investment was more important in pushing firms towards the best-practice frontier than for the transfer of advanced technology. 4.07 Externalities in terms of productivitv growth. To examine whether foreign presence affects the rate of productivity growth. we begin with a production function, with value-added Y a function of two inpats. capital and labor:  - 13 - (4) Yij, = A1,1F(L,t,K1x) The level of productivity is given by Aj, which is assumed to vary across firms within each sector j and across time t. If we totally differentiate this, take logs, and use the fact that the value of the marginal product for each factor equals its cost, we now have (5) dlogYij, = JAj^, + a,dlogLij, + a,dlogK11, where Y is value-added, dA/A is productivity growth, and L and K are labor and capital, respectively. The coefficients on the growth of labor and capital are simply their share in value-added. We test the hypothesis that productivity growth is affected by the share of foreign invest.nent both at the firm level and at the sector level by assuming that productivity growth can be decomposed into the following components: (6) dA,j!AJ,, = a DFI_Firm1j, + b DLF_SectorJ, + c C, + d D, where C, and D1 are sector and time dummies, respectively. Productivity growth varies across sectors () and time (t) and also varies as a function of the level of foreign investment in both firrns and sectors. The coefficient on DFI-Sector measures the so-called "positive externalities" effect--the extent to which the presence of DFI increases the rate ot productivity growth, after accounting for other factors. Combining (5) and (6) yields (7) dlogYijt = a DFI_Firmj11 + b DFI_Sectorj, + c C, + d D,+ a, dlogLi,, + ak dlogK,j, 4.08 The results are given in the first three columns of Table 6. Column (1) excludes time and industry dumnmies, while column (2) only excludes industry dummies. The results are not significantly affected by the inclusion of time or industry effects. At the firm level, the impact of foreign investment is negative but statistically insignificant--indicating that  - 14 - firms with foreign investment did achieve lower growth rates of productivity, although not significantly different from domestically-owned firms. 4.09 If domestic firms are increasing their productivity at a faster rate than foreign- owned firms, could this catch-up be due to dynamic exAtrnalities from DFI? Table 6 provides various alternative specifications to test for evidence of positive externalities. The share of foreign assets in total assets at the sector level is included as a right-hand side variable: if foreign presence positively affects productivity growth for domestically-owned firms, then the coefficient on DFI_Sector should be positive and statistically significant. The sigil on DFI Sector is in fact negative in almost all specifications, although it is insignificant. Columns (4) through (6) exclude all firms with foreign investment from the sample and test for positive externalities from sector-level foreign investment on wholly domestically-owned firms. Again, there is no evidence for positive externalities in terms of productivity growth.' 4.10 The lack ot evidence on positive dynamic externalities from foreign investment could be due to distortions in the trade policy regime. If foreign firms are attracted to highly protected domestic markets--seeking to exploit the rents from protection--then the results presented above could sLiffer from the classic problem of omitted variable bias. 4.11 To examine the impact of protection on potential dynamic externalities from foreign investment, the sample was split into two groups. Using three different measures of protection, a "low" protection and a "high" protection group of sectors was identified. The first measure of protection used was the average tariff level by 3-digit sector for those years where it was available--1984, 1987 and 1988. The second measure of protection used was the share of production under List A: the share of production not subject to quantitative restrictions in each sector. The third measure was the change in the coverage of List A We also separated the sample into 'low" technology and "high" technology sectors to test whether spillovers might he concentrated only in high technology areas such as electronic machinery, automobiles, etc. The results remained unchanged and, consequently, are not reported here.  - 15 - between 1984 and 1988--i.e., the reduction in quotas on a sector-by-sector basis over the period of trade reform. 4.12 The results are given in Table 7. The positive externalities--indicated by the coefficient on DFI_Sector--remain insignificant and generally negative. However, the coefficient does switch from negative (and statistically significant at the 15 percent level) to positive (but insignificant) for sectors that had a large reduction in quota coverage. At the firm level, one interesting result emerges. Using the level of tariffs and quotas as a measure of protection, the results in columns (3) and (4) suggest that foreign firms only exhibited lower productivity growth relative to domestic firms in protected sectors. In sectors with a high level of quotas (column (4)), foreign firms exhibited lower and statistically significant growth in productivity than domestic firms. Yet in sectors with low quota coverage (column (3)), their rate of productivity growth became positive (but insignificant).  - 16 - V. CONCLUSION AND IMPLICATION OF FINDINGS 5.01 Comparisons of performance between domestic and foreign-owned finns reveal that, on average, foreign firms tend to be more export oriented and to pay higher wages. Much of the differential in outward orientation between domestic and foreign firms is due, however, to the fact that foreign firms tend to be relatively large. If size is controlled for, we find that the difference in average outward orientation between foreign firms and domestic firms of the same size is much reduced. 5.02 The results also show that foreign firms exhibit higher levels of overall multi- factor productivity. However, the rate of growth of productivity is higher for their domestic counterparts. The results show that this is due in part to the distortiorlary effects of protection--foreign firms lag behind domestic firms in productivity growth primarily in protected markets. 5.03 One major benefit often attributed to direct foreign investnient is thc positive externalities of knowledge or new technology transfer t'rom t'oreign to domestic t'irms, U7sinig a production-function approach, we test the hypothesis that toreign piresence is associated with increased productivity in domestica v-owned firms. We tind evidence of dyn.amic externalities from foreign investment that result in a smaller dispersion of productivity levels across firms, making them move closer to the efficiency frontier. Hiowever, the evidence of positive externalities from firms with foreign equity to whollv domestically-owned firms in terms of productivity growth is weak at best. Altlhough domestic firms do exhihit taster productivity growth, it cannot be attributed to dynamic externalities from foreign investment. Nor is this conclusion affected when we explicitly control for variations in protection--often a source of distortionary foreign investment. 5.04 Recent attitudes towards foreign investment in developing countries have shifted as sources ot debt financing have diminished. Some countries provide su7bsidies to foreign investors through tax holidays, import duty exemptions, provision of intrastructure,  - 17 - and other policy instruments. One rationale for special treatment stems from the dynamic technology externalities that benefit domestic industry--dynamic externalities that are not internalized in the foreign firm's rate of return. In the Moroccan case, the findings related to the level and growth of productivity suggest that foreign presence has caused a one-time increase in firms' efficiency, and therefore, the findings do not appear to support special treatment.  - 18 - T ble 1: SHARE OF FOREIGN DIRECT INVESTMENT IN MANUFAC IURING C Annual hrsb oFDI Year (perent) 1985 13 1966 15 1967 14 1968 15 1969 15 Sectoral shares (percent) Sector 1985 19S9 Food products 5 5 Other food 10 15 Beverages, tobacco 20 11 TCstiles 11 13 Apparel 21 23 Leather 16 21 Wood products 16 12 Paper products 27 18 Non-metallic minerals 16 17 Basic metals 4 4 Metal products 22 22 Machineiy 18 21 Transport equipment 23 25 Electronics 32 35 Scientific instruments 13 17 Chemicals 8 15 Rubber 17 14 Other manufactures 30 10 J/ Foreign share computed as a means of foreign share in total assets, weighted by firm assets.  - 19 - Table 2: COWPARISOi OF PRODUCTIVITY, OUTWARD ORIENTATIOW, ANO WAGES BETWEEN DOXSTIC AND FOREIGN-OShED ENTERPRISES IN IAIUFACTURING (Values using weighted means in t) Output Export per as percent RaLI TFP TFPG foreign worker of "tle, woae devictiona -TFPG domestic Food products 2.0- (0.9) 15.2* (4.5) 2.3* (1.2) 0.7* (0.7) -6.4 Other food 0.5 (0.5: 2.0* (2.7) 1.2 (1.1) 1.0 (1.3) -7.3 Bverags, tobacco 1.4* (0.6) 10.8* (9.6) 2.2* (1.4) 0.9 (4.0) -7.0 TextiLes 1.1 (0.5) 1.5* (0.7) 0.9 (0.2) 0.9 (1.0) 0.0 AppareL 0.8 (1.1) 1.8* (1.1) 1.3* (1.4) 0.9 (1.0) -12.3* Leather 1.1 (0.6) 2.3* (1.4) 2.0* (1.8) 1.0 (1.0) 0.3 Wood produc:s 1.2 (1.0) 8.5* (6.3) 1.6* (1.0) 0.8* (0.8) -64.7 Paper products 1.5' (0.6) 11.7* (30.7) 1.7* (1.3) 0.9* (0.4) 14.0 Non-metalhic minerals 2.3* (2.2) 6.1* (1.6) 1.9 (2.2) 0.7* (0.5) 4.4 Basic metals 1.0 (0.3) Q.2* (0.1) 1.9* (1.2) 1.3 (21.2) -0.3 Metal products 0.6 (0.5) 4.0* (2.3) 1.1 (1.1) 1.0 (0.8) -1.5 Machinery 1.1 (2.2) 5.0* (0.2) 0.8 (1.8) 0.9 (0.7) -1.8 Transport equipment 1.6* (2.0) 1.6 (0.4) 2.0* (2.1) 0.8* (0.7) 9.7 ELectronics 1.5* (1.3) 4.5* (3.9) 2.1* (2.0) 0.8* (0.8) 0.3 Scientific instruments 1.3* (1.7) 0.3 (0.1) 1.7* (1.8) 1.0 (1.1) 16.2 Chemicals 2.0* (0.6) 1 9* (0.0) 2.6* (1.8) 0.7r (1.9) 1.1 Rubber 0.9 (1.8) 4.2' (3.6) 1.5 (3.8) 0. 9* (0.8) -1.3 Other manufactures 0.9 (0.8) 0.6 (0.5) 0.6 (0.8) 1.1 (1.0) -21.3 ALl sectors 1.2 (0.7) 2.0* (0.7) 1.7* (1.3) 0.9' (0.9) -6. 7* a. Ratio of enterprise performance for firms with at least 5 percent foreign ownership to firma with less than 5 percent foreign ownership. A "*' indicates difference in means is statistically significant at 5 percent Level for the unweighted means only. b. Average deviation of foreign firm productivity from best practice frontier/ to average deviation of domestic firm productivity. A value of Less than owe indicates less deviation from best practice among foreign firms.  - 20 - TabJL 3: COWPAAISOY OF PRODUCTIVITY, OTWAtRD ORIEhTATIOM, AND WAGES ETWEEN MAJORITY- AND NItORITY-owmED FOREIGM FIRNS (Values usian weighted mans In I) Output Exports per as percent Real TFP TFPG foreign worker' of * $les wowes deviation0 -TFPG domstic Food product 0.5' (1.0) 0.1* (0.2) 0.8* (1.0) 1.3* (1.7) -6.3 Other food 1.2 (1.0) 0.9 (1.1) 1.2 (1.0) 0.9 (0.1) -15.1 Seerae, tobacco 2.7r (2.3) - 3.6' (3.3) 1.4* (1.4) -13.3 Textiles 1.1 (1.4 1.3* (1.0) 0.9 1.1) 1.1 (.0) 1.3 Apparel 1.0 (1.6) 0.8' (0.9) 1.0 (1.1) 1.0 (1.2) 4.5 Lesther 0.7 (0.6) 0.9 (0.7) 0.8 (0.9) 0.8 (0.9) -72.4* Wood products 0.9 v0.5) 1.0 (1.2) 1.2 (0.9) 1.0 (1.9) 2.6 Poper products 0.8 (0.9) 0.1* (0.1) 0.9 (1.0) 1.1 (1.1) -8.7 Non-metallic minerals 0.5* (0.5) 1.1 (5.2) 0. 7* (0.8) 1.2 (2.2) 7.9 Basic metals 0.3' (0.6) - - 1.0 (1.4) 1.6 (1.1) -1.5 Metal products 0.9 (0.7) 1.3 (8.2) 1.1 (1.1) 0.9 (1.4) 0.5 Machinery 0.9 (1.1) 1.6 (0.9) 1.0 (1.2) 1.0 (1.8) -13.3 Tranaport equipment 1.1 (3.0) 0.8 (2.0) 1.0 (1.3) 1.4* (0.2) 12.8 Electronics 1.1 (0.9) 1.1 (1.6) 0.9 (0.9) 0.9 (1.6) 3.9 Scientific instruments 0.8 (1.2) - 1.0 (1.2) 1.1 (0.7) 17.2 Chemicals 1.3* (1.4) 0.8 (0.3) 1.4* (1.2) 0.9 (0.9) -0.9 Rubber 1.5* (2.7) 1.5 (2.4) 1.4* (2.7) 0.9 (0.8) -9.4 Other menufactures 1.4 (1.2) - 1.3 (1.1) - - 77.1* Total 0.9' (1.0) 1.1 (1.2) 1.1* (1.2) 1.0 (1.1) -2.5 a. Ratio of enterprise performance for firms with at least 50 percent foreign ownership to firms with Less than 50 percent but more than 5 percent foreign ownership. A"" indicates difference in means is statistically significant at 5 percent Level. b. Average deviation of foreigin firm productivity from best practice frontier/ to average deviation of domestic firm productivity. A value of Less than one indicates Less deviation from best practice among foreign firms.  - 21 - Tdlb3 4: IMPACT OF FOREIGN OWNERSIP ON TIE LEVEL OF FIRM PROOUCTIVITY, DEFINED AS THE DEVIATION FROM SECTOR-LEVEL EST-PRACTICE PERFORMANCE Dependt variable: u4 AlL firm Non-OFI firm Interc.,)t -.441 -.444 (.004) (.004) DFI (firm) 0.030 (.008) DFI (sector) 0.170 0.174 (0.019) (.022) Size of firm 0.002 0.002 (0.00001) (0.0001) N 3933 3105 R-square .16 .12 Note: Standard errors in 0. TabLe 5: IMPACT OF FOREIGN OWNERSHIP ON THE LEVEL OF PRODUCTIVITY, BY HIGH TECHNOLOGY AND LOW TECHNOLOGY SECTORS Non-DFI firms Dependent variabLe: u High TechnoLogy Low Technolov Sectors Sectors Intercept -.397 -.448 (.020) (.004) DFI (sector) 0.017 0.189 (0.082S (.024) Size of firm 0.002 0.002 (0.0003) (0.0001) N 410 2693 R-square .06 .14 Note: Standard errors in 0.  - 22 - Table: TESTIICG FR EXTERNALITIES FUI FOREIGN INVESTMENT FOR TNE GRWTH OF PWDUCTIVITY Dependmnt variable: Change in Log Y All firm lon-DFI firm (1) (2) (3) (4) (5) (6) d (tog L) 0.773 .772 .770 0.772 0.770 .770 (.009) (.009) (.009) (.010) (.010) (.010) d (tLog K) 0.088 0.090 .088 0.105 0.108 0.106 (.011) (.011) (.011) (0.013) (0.0t3) (0.013) DFI (firm) -0.018 -0.019 -0.020 - - - (.023) (.023) (.023) DFI (sector) -0.037 -0.029 -0.039 .009 .0C1 -.011 ( .052) ( .01;2) ( .061) ( .063) < .063) ( .073) Time dumies No Yes Yes No Yes Yes Industry dLowies No No Yes No No Yes R-r quare .41 .41 .42 .42 .42 .42 N 11,772 11,772 11,772 9,629 9,629 9,629 Note: Standard errors in 0. DFI (firm) = share of firm's assets which are foreign owned. DFI (sector) = share of DFI in each sector.  - 23 - Table : TESTING FOR EXTERNALITIES FROM FOtEIGN INVESTMENT FOR PRODUCTIVITY GROWTH UNDER VARYINC TRADE REGIMES Alt Firm Dapendent variable: Change in tog Y Tariffs Cuot" .oduction in awota La iah LOW lith La (1) (2) (3) C() (5) (6) d (tog L) 0.753 0.764 0.723 0.777 0.781 0.761 (.025) (.016) (.023) (.016) (.012) (.013) d (tog K) 0.077 0.069 0.061 0.077 0.081 0.097 (.035) (0.019) (.025) (.022) (.014) (.018) DFI (firm) 0.003 -.043 0.039 -0.091 -.027 -0.004 0.053) (.041) (.044) (.047) (.028) (.039) DFI (sector) -0.101 -0.034 -0.109 -0.086 0.014 -0.133 (0.117) (.111) (.107) (.113) (.066) (.085) R-square .38 .38 .33 .41 .42 .40 N 1585 4212 2154 3643 6402 5370 Note: Standard errors in 0. DFI (firm) = share of firm's assets which are foreign owned. DFI (sector) = share of DFI in each sector.  - 24 - BIBLIOGRAPHY Blomstrom, Magnus, 1986. "Foreign Investment and Productive Efficiency: the Case of Mexico", The Journal of Industrial Economics, Vol.XXV (September). -------, 1989. Foreign Investment and Spillovers. Routledge. London and New York. ------------, and Hakan Persson, 1983. "Foreign Investment and Spillover Efficiency in an Underdeveloped Economy: Evidence from the Mexican Manufacturing Industry", World Development, Vol. 11, Number 6. ------------. and Edward W. Wolff, 1989. "Multinational Corporations and Productivity Convergence in Mexico". NYU working paper. Caves, Richard E., 1974. "Multinational firms, competition, and Productivity in Host-Country Markets", Econoimica (May). Globerman, Steven, 1979. "Foreign Direct Investment and 'Spillover' Efficiency Benefits in Canadian Manufacturing Industries", Caniadian Journal of Econromics (Februar-v) Haddad. Mona, forthcoming. "The Effect of Trade Liberalizatior. on Multi-Factor Productivity: The Case of Morocco." PhD Dissertatiorn. George Washington University. International Monetary Fund, 1991. "Morocco: Recent Economic Developments." (March). Ministere du Commerce et de l'Industrie, March 1989. "Code des Investissements Industriels, Royaume du Maroc". Price Waterhouse, 1988. "Doing Business in Morocco". Price Waterhouse, 1989. "Investir au Maroc". Schmidt, Peter and Robin C. Sickles. 1984. "Production Frontiers and Panel Data". Journal of Business and Economic Statistics, Vol. 2, Number 4 (Octobel):367-374. World Bank, 1988. "Morocco: The Impact of Trade l1iberalizationi on Trade and Industrial Adjustment", (March). UNDP-World Bank, 1990. "Morocco 2000: An Open and Competitive Economy", Trade Expansion Program.  - 25 - APPENDIX I: DESCRIPTION OF THE MOROCCAN INDUSTRIALDATA The empirical analysis of the Moroccan industrial performance is based on firm-level industrial survey data collected by the Moroccan Ministry of Commerce and Industry. The data cover the period 1985 to 1989. The surveys are exhaustive and include all enterprises with 10 or more employees, as well as enterprises with fewer than 10 employees and that realized a sales revenue greater than 100,000 dirhams (approximately US$11,000 at the average 1984-1989 official exchange rate). A firm's activity is described by a four-digit Moroccan nomenclature of economic activities (Nomenclature Marocaine des Activitts Economiques, or NMAE). which is often referred to as the nomenclature of national accounting (Nomenclature de )a Comptabilitt Nationale, or NCN). Since intermediate inputs were not available, it was necessary to use value- added in the production function instead of total output. A capital stock measure was included only in 1988 as the total equipment goods assets owned by the firm and was used as the benchmark to construct capital stock for the remaining years using the perpetual inventory method forward and backward. Firms that were not available in 1988 (the benchmark year) had to be omitted from the productivity analysis. Libor input was expressed in terms of efficiency units (the total labor cost divided by the minimum wage). Looking at the patterns of major economic variables, we compare them across different sectors in the manufacturing industry. In order to have a compliant analysis, the original firm-level data were aggregated into 18 two-digit-level industries. Characteristics of our sample are reported in Table A. 1 for 1987. In terms of the number of firms (column 1) and the number for labor (column 2), the largest sectors are food products and textiles. However, in terms of the share in manufacturing revenue (column 7), the chemical products sector emerges as a major sector beside the other two. This is fully understandable given the importance of phosphate in Morocco. OUtpLut per worker (column 6) is the highest in relatively capital-intensive (see the capital-output ratio in column 5) sectors such as basic metal and chemical products. By far,  - 26 - the most export-oriented sector is clothing, which sells over 80 percent of its output abroad (column 8). The other sectors that export are chemical products, which include the derivatives of phosphate, and leather and shoes. As expected, import penetration (column 11) is high in intermediates and capital-goods producing sectors.  - 27 - APPENDIX II: CALCULATION OF MULTI-FACTOR PRODUCTIVITY AT THE FIRM LEVEL Imagine a production function, with value-added Y a function of two inputs, capital and labor: (1) Y11, = At F(jK1Jt) An ideal measure of the level of productivity would be an estimate of AX, which is assumed to vary across firms within each sector j. Schmidt and Sickles (1984) have suggested a way to estimate these firm-specific productivity measures by modifying standard techniques used for panel data. We have the following model for each sector j (note that the subscript j is suppressed and the variables are now expressed in logarithms): (2) Y1, = a, + p'Xi, + E*, where i = 1...., N and t = 1, ..., T. Yit is the value-added (in logarithm) for the i' firm at time t, Xi, is a 2xN matrix of inputs, 6' is a 1x2 vector of constant parameters to be estimated, and a, is a lxN vector of intercepts representing the effects of the variables specific to the ith individual and invariant over time. The a, for each firm i is obtained by including i dummy variables that take the value 1 for the corresponding i and 0 otherwise. The error term ei, represents the effects of the omitted variables that are both time and cross-sectional varying. We assume that ei, is characterized by an independently and identically distributed random variable with mean zero and variance a'. Given these properties of ei, the ordinary-least-squares (OLS) estimator of a and , in (3) is the best linear unbiased estimator (BLUE): (4) &i = Y, - 4i (5) i = [Zit(X,-XI)(Yit-XJT] [Zit(X1t-Xi)(Yi'-Yi)]  - 28 - where Y' = (1/T)E,Yi, and XY = (lfr)z,X,. The computational procedure for estimating the slope parameters of this model does not require that the dummy variables for the individual effects actually be included in the matrix of explanatory variables. The variables can be transformed by subtracting from each cross-se-.tional unit the mean of its time-series observations and then applying the least- squaro.s method without the intercept to the transformed data: (6) (Yit - Y) = (XI, - X*) + (eC, - 0 The estimates of the N intercept parameters can then be obtained as the means of the residuals for each cross-sectional unit by using equation (4).  - 2c) - INDUSTRY SERIES PAPERS No. 1 Japanese Direct Foreign Investment: Patterns and Implications for Developing Countries, February 1989. No. 2 Emerging Patterns of International Competition in Selected Industrial Product Groups, February 1989. No. 3 Chang ig Firm Boundaries: Analysis of Technology-Sharing Alliances, Februarv 1989. No. 4 Technological Advance and Organizational Innovation in the Engineering Industry, March 1989. No. 5 Export Catalyst in Low-Income Countries, November 1989. Nco. 6 Overview of Japanese Industrial Technology Development, March 1989. 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June 1990 No. 38 Export Finance in the Philippines: Opportunities and Constraints for Developing Country Suppliers, June 1990. No. 39 The U.S. Automotive Aftermarket: Opportunities and Constraints for Developing Countrv Suppliers, June 1990 No. 40 Investment As A Determinant of Industrial Competitiveness and Comparative Advantage: Evidence from Six Countries, August 1990 (not yet published) No. 41 Adjustment and Constrained Response: Malawi at the Threshold of Sustained Growth, October 1990. No. 42 Export F'inance - Issues and Directions Case Study of the Philippines, December 1990 No. 43 The Basics ot' Antitrust Policy: A Review of Ten Nations and the EEC, Februarv 1991. No. 44 Technology Strategy in the Economy of Taiwan: Exploiting Foregin Linkages and Investing in Local Capability, January 1991 No. 45 The Impact of Adjustment Lending on Industry in African Countries, June 1991. No. 46 Banking Automation and Productivity Change: The Brazilian Experience, July 1991.  - 32 - No. 47 Global Trends in Textile Technology and Trade, December 1991. Note: For extra copies of these papers please contact Miss Wendy Young on extension 33618, Room S-4101  - 33 - ERfY SERIES PER No. 1 Energy Issues in the Developing W>orld, February 1988. No. 2 Review of World Bank Lending for Electric Power, March 1988. No. 3 Some Considerations in Collecting Data on Household Energy Consumption, March 1988. No. 4 Improving Power System Efficiency in the Developing Countries through Performance Contracting, May 1988. No. 5 Impact of Lower Oil Prices on Renewable Energy Technologies, May 1988. No. 6 A Comparison of Lamps for Domestic Lighting in Developing Countries, June 1988. No. 7 Recent World Bank Activities in Energy (Revised October 1989). No. 8 A Visual Overview of the World Oil Markets, July 1988. No. 9 Current International Gas Trades and Prices, November 1988. No. 10 Promoting Investment for Natural Gas Exploration and Production in Developing Countries, January 1988. No. 11 Technology Survey Report on Electric Power Systems, February 1989. No. 12 Recent Developrnents in the L.S. Power Sector and Their Relevance for the Developing Couit:nes, February 1989. No. 13 Domestic Energy Pricing Policies, April 1989. No. 14 Financing of the Energy Sector in Developing Countries, April 1989. No. 15 The Future Role of Hydropower in Developing Countries, April 1989. No. 16 Fuelwood Stumpage: Considerations for Developing Country Energy Planning, June 1989. No. 17 Incorporating Risk and Uncertainty in Power System Planning, June 1989. No. 18 Review and Evaluation of Historic Electricity Forecasting Experience, (1960- 1985), June 1989. No. 19 Woodfuel Supply and Environmental Management, July 1909. No. 20 The Malawi Charcoal Project - Experience and Lessons, January 1990. No. 21 Capital Expenditures for Electric Power in the Developing Countries in the 1990s, February 1990. No. 22 A Review of Regulation of the Power "ctors in Developing Countries, February 1990.  - 34 - No. 23 Summary Data Sheets of 1987 Power and Commercial Energy Statistics for 100 Developing Countries, Nlarch 1990 No. 24 A Review of the Treatment of Environmental Aspects of Bank Energy Projects, March 1990. No. 25 The Status of Liquified Natural Gas Worldwide, March 1990. No. 26 Population Growth, Wood Fuels, and Resource Problems in Sub-Saharan Africa, March 1990. No. 27 The Status of Nuclear Power Technology - An Update, April 1990. No. 28 Decommissioning of Nuclear Power Facilities, April 1990. No. 29 Interfuel Substitution and Changes in the Way Households Use Energy: The Case of Cooking and Lighting Behavior in Urban Java, October 1990. No. 30 Regulation, Deregulation, or Reregulation--What is Needed in LDCs Power Sector? July 1990. No. 31 Understanding the Costs and Schedules of W'orld Bank Supported Hydroelectric Projects, July 1990. No. 32 Review of Electricity Tariffs in D. coping Countr.es During the 1980s, November 1990. No. 33 Private Secror Participa6ion in Power thrcugh BOOT Schemes, December 1990. No. 34 Identifying the Basic Conditions for Economic Generation of Public Electuicry from Surplus Bagasse in Sugar Mills, April 1991 No. 35 Prospects for Gas-Fueled Combined-Cvcle Power Gerieratior in the Developing Countries, May 1991. No. 36 Radioactive Waste Management - A Background Study, June 1991. No. 37 A Study of the Transfer of Petroleum Fuels Pollution, July 1991. No. 38 Improving Charcoaling Efficiency in the Traditional Rural Sector, July 1991. No. 39 Decision Making Under Uncertainty - An Option Valuation Approach to Power Planning, August 1991 No. 40 Summary 1988 Power Data Sheets for 100 Developing Countries, August 1991. No. 41 Health and Safety Aspects of Nuclear Power Plants, August 1991. No. 42 A Review of International Power Sales Agreements, August 1991. No. 43 Guideline for Diesel Generating Plant Specification and Bid Evaluation, September 1991. No. 44 A Methodology for Regional Assessment of Small Scale Hydro Power, September 1991.  - '15 - No. 45 Guidelines for Assessing Wind Energy Po!encial, September 1991. No. 46 Core Report of the Electric Power Utility Efficiency Improvement Study, September 1991. For copies, please call extension 33616.