Dynamic linkages between foreign direct investment, technology transfer, local human capital, and economic growth: empirical evidence from Morocco

This study examines the individual and interactive effects of foreign direct investment (FDI), human capital, and technology transfer on economic growth in Morocco over the period 1990–2023. Using a parsimonious autoregressive distributed lag (ARDL) framework, the analysis captures both short-run and long-run dynamics while explicitly accounting for interaction mechanisms and distributed lag structures. Because several regressors enter the model with multiple lags, economically meaningful impacts are assessed through cumulative (net) effects, formally evaluated using Wald joint-significance tests. The results indicate that, when considered in isolation, FDI exhibits a negative and statistically significant net effect on economic growth, despite positive contemporaneous coefficients. In contrast, technology transfer and human capital display positive net effects in the baseline specification. More importantly, the interaction model shows that FDI becomes growth-enhancing only when combined with technology transfer and adequate levels of human capital, providing robust evidence of complementarity effects and strong support for the absorptive capacity hypothesis. These findings highlight the conditional nature of FDI-led growth and underscore the importance of coordinated investment, education, and innovation policies in fostering sustainable economic growth in Morocco.