Intensive and Extensive Growth and Upgrading in Global Value Chains: Empirical Evidence from the Moroccan Automotive Industry

Abstract

While the growth of Morocco’s automotive industry is well documented, its nature and its compatibility with upgrading remain little examined within an integrated framework. This article jointly analyses two macroeconomic readings of extensive and intensive growth: one applied to exports, distinguishing the deepening of existing segments from diversification, and the other to value added, distinguishing employment from apparent labour productivity. The study uses three complementary sources, each within its own statistical scope: foreign-trade data from the Office des Changes, national accounts from the Haut-Commissariat au Plan and the OECD Trade in Value Added (TiVA) indicators. The approach is descriptive and does not seek to establish causal relationships between integration and upgrading. Results show that the nature of growth varies across phases. Productivity contributes more than employment to value-added growth over 2010-2024, whereas the sensitivity test for 2014-2024 indicates growth mainly driven by employment. Export expansion combines the deepening of vehicle manufacturing and wiring with diversification towards powertrain and other components. These changes are compatible with product upgrading and provide signs consistent with process upgrading. By contrast, the share of domestic value added in exports declines, while foreign content grows faster, and this decline is among the most pronounced in the comparison economies. This result is consistent with local integration driven in part by foreign suppliers that import most of their inputs: the local integration rate and the domestic share can thus move in opposite directions. Functional upgrading remains uncertain with the data used. The article concludes that the productive transformation is substantial but incomplete, with domestic deepening remaining a central challenge.

JEL Classification : F14, F23, L62, O55.

Paper type : Empirical analysis.