Human capital and FDI attractiveness in Morocco: An econometric analysis using the error correction model

Abstract

This article aims to examine the influence of human capital on foreign direct investment (FDI). The main objective of this study is to identify whether a high level of human capital, incorporating skills, innovation, and professional competencies, is a significant factor in positioning Morocco as an attractive destination for foreign direct investment. To achieve this, the study employs an econometric analysis of time series data using the Error Correction Model (ECM) over the period 1990–2019 in Morocco. The results indicate that the various components of human capital significantly contribute to FDI attractiveness, except for the literacy rate of the population aged 15 and above, which is not statistically significant. However, the number of graduates from institutes and higher schools negatively impacts FDI inflows to Morocco. Conversely, the number of graduates in vocational training positively influences FDI inflows. Regarding the control variables, GDP is significant but has a negative effect on FDI inflows, while gross fixed capital formation has a positive and significant impact on FDI.