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FDI-Led Growth and Environmental Trade-Offs in Morocco: Long-Run Cointegration and Dynamic Evidence Fayou, Hamid; Boubrahimi, Nabil
ORGANIZE: Journal of Economics, Management and Finance Vol. 5 No. 1 (2026): Economic Transformation and Development
Publisher : Perkumpulan Dosen Fakultas Agama Islam Indramayu

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.58355/organize.v5i1.202

Abstract

This study provides a comprehensive analysis of the theoretical frameworks and quantitative effects of Foreign Direct Investment (FDI) in developing economies, commonly referred to as the Global South. By integrating robust methodological approaches Vector Error Correction Model (VECM) analysis—this research examines the multi-faceted impact of FDI on economic growth, environmental sustainability, and energy consumption. The findings indicate a complex, non-linear relationship between FDI and key economic variables, often mediated by local institutions, absorptive capacities, and sectoral characteristics. The results confirm a U-shaped relationship between FDI and renewable energy consumption globally, where initial effects may be negative but turn positive over time as economies develop and integrate advanced technologies . Furthermore, the analysis reveals that the interaction between FDI and economic growth significantly affects renewable energy consumption, aligning with the trade-off theory and race-to-the-bottom hypothesis rather than the conservation hypothesis . For policymakers, this integrated analysis offers valuable insights for designing strategic policies that maximize FDI benefits while mitigating potential negative externalities, particularly in environmental domains where the pollution haven hypothesis remains a contested framework
Does Diplomatic Influence Pay? A Gravity Model Estimation of the Effect of Morocco’s Soft Power Assets on its Bilateral Trade Volumes in Africa Fayou, Hamid; Boubrahimi, Nabil
Daengku: Journal of Humanities and Social Sciences Innovation Vol. 6 No. 1 (2026)
Publisher : PT Mattawang Mediatama Solution

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.35877/454RI.daengku4569

Abstract

This study investigates whether Morocco’s soft power assets its (cultural religious, economic, and diplomatic influence) translate into tangible economic benefits in the form of increased bilateral trade with African partners. Using an augmented gravity model of trade estimated with Poisson Pseudo-Maximum Likelihood (PPML) for a panel of 45 African countries over the period 2010–2024, we quantify the impact of various soft power proxies on Morocco’s trade flows. The results indicate that soft-power instruments, particularly cultural diplomacy, religious ties, and active peacekeeping contributions, exert a statistically significant and economically meaningful positive effect on trade volumes, even after controlling for traditional gravity determinants such as GDP, distance, and colonial links. The findings suggest that Morocco’s deliberate soft-power strategy in Africa is not merely a political tool but also a viable economic diplomacy that can enhance regional trade integration. Policy implications include the continued investment in soft-power channels as a complement to traditional trade liberalization measures.