Foreign Direct Investment, Taxation, and Growth Dynamics in Morocco: An ARDL Bounds-Testing Analysis

The existing empirical literature on Morocco has examined FDI and economic growth, taxation and growth, and taxation and FDI separately. This study addresses this gap by investigating taxation’s moderating role in the FDI–growth nexus using Moroccan data from 1990 to 2024 and an Autoregressive Distributed Lag (ARDL) bounds-testing approach. The findings show that FDI is positively associated with long-run GDP growth, real GDP, and GDP per capita, whereas the aggregate fiscal burden and its interaction with FDI are negatively associated with these outcomes. Nevertheless, the marginal association of FDI remains positive across Morocco’s observed tax range, although it declines by 4.11%, 31.08%, and 13.47%, respectively. These findings show that the realised fiscal burden conditions the FDI–growth relationship.