The role of Financial Market Access, Depth, and Efficiency in Morocco’s Low-Carbon Economy Transition

This study examines the impact of Financial Market Access (FMA), Financial Market Depth (FMD), and Financial Market Efficiency (FME) on Morocco’s transition to a low-carbon economy (LCE) from 1980 to 2021. Using carbon productivity (CP) as a proxy for the LCE transition, the analysis employs robust econometric techniques, including Dynamic Ordinary Least Squares (DOLS), Fully Modified Ordinary Least Squares (FMOLS), and Canonical Cointegrating Regression (CCR), to ensure valid and reliable results. The results from DOLS, FMOLS and CCR reveal that FMA has a positive and statistically significant effect on CP, indicating that FMA contributes to the LCE transition. Similarly, FME exhibits a positive and significant impact on CP but only in FMOLS and CCR models. In contrast, FMD shows a negative and significant impact on CP across the three estimation techniques. These findings underscore the importance of FMA and FME in enhancing CP and the need to improve FMD in order to support the LCE in Morocco.