Total Factor Productivity and Morocco’s Participation in Global Value Chains: Evidence from ARDL Bounds Testing Approach

One of the most spectacular developments in international trade in recent decades has been the rise of global value chains (GVCs). Theoretical and empirical research shows that participation in GVCs offers numerous advantages for developing countries, has beneficial macroeconomic effects and could represent a development strategy. This paper is a contribution to the literature on global value chains, and empirically investigates the short- and long-term impact of Morocco’s participation in GVCs on total factor productivity (TFP). The data used are annual time series covering the period 1991-2021. The data were obtained from the World Bank database, the OECD TIVA edition 2021 database and the Penn World Version 10.0 database. The empirical results showed a long-term relationship between TFP and participation in global value chains, as well as with the other control variables, namely the real effective exchange rate and wages. Indeed, upstream participation in GVCs has a negative impact on TFP in the short and long term, while downstream participation has a positive effect on TFP in the short and long term. The econometric study also shows that the real effective exchange rate has a negative impact on TFP in the short and long term, while wages have a positive impact on TFP in the short and long term.