Impact of foreign direct investment on the emergence of SMEs in Morocco: Analysis and strategic perspectives

Kaoutar Boushib (), Mustapha Moujahid () and Malak Hajji ()

Asian Economic and Financial Review, 2024, vol. 14, issue 11, 882-894

Abstract: This research investigates the impact of foreign direct investment on the emergence of SMES in Morocco. One of the strategic objectives that Morocco seeks to achieve through its policy of promoting foreign direct investment (FDI) is the exploitation of positive externalities on its national economy. These benefits include encouraging the creation and development of small and medium-sized enterprises (SMEs). This article aims to empirically examine the impact of FDI on the creation of SMEs in Morocco, assessing both long-term and short-term effects. A time series econometric analysis was conducted using Moroccan macroeconomic data covering the period from 2009 to 2022. The study applied a cointegration approach and a vector error correction model (VECM) to assess the relationship between FDI inflows and SME creation. The empirical results reveal that, in the long term, the FDI variable exerts a positive and statistically significant effect on the creation of SME. Conversely, the short-term results show no statistically significant effect, suggesting that the influence of FDI on SME creation does not materialize immediately. FDI is a vital contributor to SME development in Morocco, but its benefits materialize over the long run, necessitating sustained policy efforts to maximize these effects. Policymakers should focus on creating an environment that fosters long-term investments and facilitates the absorption of FDI spillovers, particularly in sectors linked to SME development.

Keywords: Cointegration approach; Economic growth; Foreign direct investment; Morocco; Small and medium-sized enterprises; Spillovers; Vector error-corrected model. (search for similar items in EconPapers)
Date: 2024
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