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Did the Morocco stock market benefit from the free trade agreement with the US?

2018; Elsevier BV; Volume: 10; Issue: 2 Linguagem: Inglês

10.1080/19186444.2018.1475092

1918-6444

Yvan Nezerwe, Aristide Karangwa,

Market Dynamics and Volatility

The US-Morocco Free Trade Agreement (FTA) promised to eliminate trade barriers between the two countries over a period of 25 years. The negotiation and conclusion of the agreement presented challenges for the US negotiating team. Very little trade in services existed between the two countries before the negotiations, which made it difficult to identify interests and obstacles. This paper examines the impact of the FTA on the stock returns in Morocco. The Free Trade Area was officially signed on 15th June 2004. It was implemented on 1st January 2006. The study uses an OLS regression on the Casablanca Stock Exchange returns and the daily data were pulled from DataStream. The data selected are the MASI daily index prices in the Casablanca Stock Exchange. Empirical findings showed that the FTA implementation had a positive impact on the stock returns in Morocco. The results of the study could be used for policymakers, financial professionals and investors.