Empirical analysis of the relationship between FDI and economic growth in Morocco

Anas Mossadak
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Anas Mossadak: Mohammed V University, Morocco

Theoretical and Applied Economics, 2025, vol. XXXII, issue 3(644), Autumn, 191-202

Abstract: This study examines the relationship between Foreign Direct Investment (FDI) and economic growth in Morocco. A VAR model and Granger causality tests, applied to World Bank data (1970–2024), reveal unidirectional causality from FDI to growth: a 1% shock to FDI generates a cumulative 0.3% effect on GDP, confirming FDI’s role as an economic growth determinant. Morocco has enhanced its attractiveness through structural reforms (Tanger Med, the Green Morocco Plan, etc.) and significant sectoral diversification. However, challenges persist: post-Covid vulnerability, reliance on traditional sectors (tourism, phosphates, light industry), and institutional shortcomings. The findings call for strengthening governance, prioritizing technology-driven FDI, and investing in education to maximize spillover effects.

Keywords: FDI; economic growth; Morocco; VAR model; Granger causality. (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxxii:y:2025:i:3(644):p:191-202

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