Stock Exchange and Economic Growth in Morocco (1991-2022)

Abstract: The analysis of the relationship between stock exchange growth and economic growth in Morocco during the period 1991-2022 can help us to assess the degree of integration of financial market activities in the real economy. After a review of the theoretical and empirical literature of this relationship and an econometric analysis of the economic and variables, an explanation of the econometric results is proposed. The non-existence of a statistically significant relationship between economic growth and stock exchange growth can be explained by the weight and ripple effects of the agricultural sector in Morocco (14% of GDP on average), the dominance of few companies listed (47% of stock market capitalization, on average) and the very reduced number of companies listed on the Casablanca Stock Exchange (65 on average). So, it’s possible to argue that the very low representativeness of Casablanca Stock Exchange (CSE) in the Moroccan economy explains its low level of integration and, consequently, the disconnection between the dynamics of CSE and the Moroccan economy growth.

Key words: Casablanca Stock Exchange (CSE), economic growth, market model, return, risk

JEL code: G00