The Effects of FDI on the Moroccan Economy: An Empirical Estimate from a Structural Model

Abstract

The primary aim of the present article is to study whether foreign direct investment (FDI) exerts positive or negative effects on the Moroccan economy. Thus, through a structural model of simultaneous equations, the effects of FDI were examined in terms of economic growth, foreign trade, human capital and domestic investment in Morocco. The empirical results of this study show that FDI clearly demonstrates significant and positive effects on the first three variables whereas, it appears that there is no significant correlation with the domestic investment variable.Contribution/ Originality: This study contributes to provide the effects of foreign direct investment on the Moroccan economy by estimating an econometric structural model of simultaneous equations.

The Effect of Foreign Direct Investment and Trade Openness on Economic Growth: Evidence from Five African Countries

“…The promotion of investment, including tax relief, judicial system reform, trade liberalization, industrial property strengthening, banking sector modernization, infrastructure development, and development of several free zones (Sfar and Mtar, 2017). Conversely, Uganda experiences a higher impact on trade openness and the flow of FDI from the pooled model because most of the agricultural projects that foreign companies invest in involve producing flowers for export markets.…”

“…African countries have identified FDI as accumulating capital to support economic development. Numerous literature [36] The Effect of Foreign Direct Investment and Trade Openness on Economic Growth: Evidence from Five African Countries and empirical findings found that FDI stimulates growth in developing countries. FDI is one of the explanatory variables that the modern domestic growth theory emphasizes as a determinant driving economic expansion (Zarria, 2021).…”