FOREIGN DIRECT INVESTMENT, FOREIGN CERTIFICATION AND FIRM PERFORMANCE IN MOROCCO: EVIDENCE FROM THE WORLD BANK ENTERPRISE SURVEY

Charaf Eddine Moussir and Mariem Liouaeddine

Studies in Business and Economics, 2023, vol. 18, issue 3, 198-213

Abstract: In an increasingly complex international environment, the expansion of global capital flows, particularly foreign direct investment (FDI),has become an important catalyst in developing countries, in part due to a large and significant integration into global value chains (GVCs). Theoretically, the presence of multinationals in the host country is supposed to increase productivity, employment, wages, know-how, and technology of domestic firms. However, so far, the results in the empirical literature have been unclear, mainly due to the limited reliable and detailed enterprise-level data. As a result, in this paper we attempt to examine whether there is a significant difference between multinationals (MNE) and domestic firms in Morocco on a set of economic performance outcomes. To do so, we used firm-level data obtained from the World Bank Enterprise Survey for the year 2019, using a quasi experimental technique called propensity score matching (PSM). The results reveal that the difference between foreign-owned and domestic matched firms leads to a decrease in labor productivity, higher employment and non significant impact on wages. In addition, our findings indicate that the use of foreign certification shows a positive impact on the demand of skilled labor than for foreign ownership indicator.

Keywords: Multinational Firms; Labor productivity; wages; Propensity score matching; Morocco (search for similar items in EconPapers)
Date: 2023
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