Factors of FDI and their Impact on the Moroccan Economy: An Empirical Investigation Using the ARDL Approach

Abstract

Foreign direct investment (FDI) has gained importance in recent years as an essential component of economic growth. This work has a dual focus: on the one hand, it aims to identify the main determinants of FDI in Morocco, and on the other, it attempts to measure the effect of FDI on the Moroccan economy over the period 1990-2020. We have adopted an approach using the Autoregressive Staggered Lag (ARDL) model, as proposed by Pesaran et al. (2001). The main findings of this study indicate that high economic performance, well-trained human capital, economic stability, market size, and trade openness are the main determinants of FDI. FDI has a positive and significant effect on the Moroccan economy in both the short and long term.