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IMPACT OF TAX INCENTIVES ON THE ATTRACTIVENESS OF FDI IN MOROCCO: ECONOMETRIC MODELLING BETWEEN 2003 AND 2022

    Professor Ghizlane Chouay, PhD student Abdelmounaim Billal

Abstract

In the current context of increasing economic integration, public authorities have implemented a number of measures aimed at promoting the attractiveness of FDI. Tax policy is one of the key determinants in promoting FDI. Taxation may influence the three aspects outlined in the OLI paradigm proposed by Dunning (1977). However, analysis of its impact on the attractiveness of FDI has been marginalised in favour of other determinants such as the unit cost of production and the market potential of the host country. In Morocco, tax revenues constitute the bulk of ordinary revenues. Any increase in tax incentives leads to an increase in tax expenditures. In this sense, our research focuses on the impact of tax incentives implemented in Morocco on the promotion of FDI, using tax expenditures as an indicator of fiscal measures. Our methodological approach consists of developing an econometric model based on an ARDL model with the following variables, fiscal expenditure, GDP and the degree of openness. In this analysis, we will first examine the impact of these determinants on the attractiveness of FDI. Secondly, we will discuss the results obtained.

Keyword : Taxation; FDI; OLI paradigm; Tax expenditures; ARDL.

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OCTOBER 27, 2025
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References


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