Does Moroccan Diaspora play a role in the location of Moroccan FDI? An empirical investigation on outward FDI into 46 host countries

Abstract

The paper investigates the impact of the Moroccan diaspora in host countries on attracting foreign direct investment from Moroccan Multinational Enterprises. Utilizing cross-sectional data encompassing outward FDI to 46 countries hosting Moroccan migrants, the Robust Weighted Least Squares estimation method reveals a positive association between the size of the Moroccan diaspora and outward FDI. These results affirm the central hypothesis, highlighting the significant role of social networks, such as diaspora, in fostering connectivity between the MNE and its subsidiaries, mitigating foreignness liabilities and psychic distance. Moreover, the study unveils a nuanced perspective: technological capabilities and institutional quality act as negative moderators, shaping a multifaceted relationship. These findings enrich our comprehension of diaspora-driven FDI dynamics, providing fresh insights into the moderating influences of technological capabilities and institutional quality in the realm of outward FDI from Morocco.