Production Fragmentation in Electrical Components

Abstract: This paper analyses production fragmentation in the Moroccan electrical components industry. The different driving forces behind product fragmentation are studied. Balassa’s index of revealed comparative advantage is used to measure possible specialisation. The empirical data shows a comparative advantage within certain product groups which implies that Morocco is participating in international production sharing. It also shows that Morocco’s degree of integration combined with measures taken to facilitate trade has led to lower transaction costs. The paper concludes that Morocco seems to meet the conditions needed for fragmentation to arise and that it has a comparative advantage within certain product groups in the industry of electrical components. To achieve further competitiveness within the industry, human capital must be targeted.