How Productivity, Capital Investment, Employment, Human Capital and Energy Are Affecting Economic Growth in Morocco? An ARDL, FMOLS, DOLS and CCR Approaches

Abstract

Abstract This paper aims to scrutinize the effects of; productivity, capital investment, human capital, employment and energy intensity; on economic growth in Morocco under the Energy-augmented Cobb Douglas production function (CDPF) framework, using extended data from 1965 to 2022. The ADF unit root test confirmed the existence of cointegration among variables, then, the ARDL BTA/ECM model proved the presence of long-term relationship within, in which the explanatory variables progress all together positively and proportionally to generate economic growth, just as stipulate the standard CDPF. The outputs reliability was validated by FMOLS, DOLS, and CCR tests. Results implies that an additional unit in GDP corresponds, in terms of units to, 1.87 in productivity level, 0.12 in capital investment, 4.19 in of human capital, 0.98 in labor force and 2.52 in energy intensity, that Moroccan economy is human capital intensive unlike when it comes to physical capital. In the light of this findings, we think that Morocco should accelerate its industrial transition, proceed to a large modernization and mechanisation of its agriculture in order to inspire more productivity to its entire economy, keep acting in the sense of more structural reforms to improve the business environment, share out the public spending equitably following two dimensions, physical by upgrading local infrastructure to attract more investments, human by promoting human capital through education and social protection.