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Road infrastructure investments drive job creation in Morocco, reveals a study

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A new survey published on Thursday by the World Bank’s Middle East and North Africa (MENA) Transport Team explored the importance of road infrastructure investments in prompting job creation among enterprises.

Titled, “Morocco: How do road infrastructure investments influence private sector investments?”, the study revealed a positive correlation between motorway infrastructure, particularly motorway openings, and employment growth. Notably, a significant portion of 68% of survey firms relocating or expanding near new motorways subsequently injected new jobs.

For context, World Bank (MENA) Transport Team surveyed 100 firms–mainly involved in trade, construction, services, transport, and industry sectors– most of which (80%) were small and had less than ten employees, and the rest (20%) had 11 to 60 employees.

They targeted firms along the Khouribga-Beni Mellal and El Jadida-Safi motorways, with 50 surveyed along each route. Of these, 57 firms were established before the motorways opened, while 43 were founded after.

The study noted that 58% of surveyed firms in Morocco reported a surge in employees compared to their previous workforce following the highway’s opening.

When measuring how enhanced spatial accessibility affects firms’ choices in investment locations, the researchers found that 63% of the surveyed firms noted a positive impact on accessing domestic markets due to the motorway, citing time savings and improved travel convenience, which supported productivity.

It was noted that 78 firms from the overall surveyed emphasized the significance of motorway access as “somewhat important,” “important,” or “absolutely critical.”

Motorways are crucial for firms integrated into global and regional markets, as they provide easy access to ports and facilitate international trade, the authors of this study highlighted.

While the study didn’t assess their impact on productivity, firms consider motorways essential for market access rather than accessing labor, with only a quarter viewing proximity to markets as “absolutely critical” and a similar number declaring it as “not important.”

The survey also revealed that 56% of firms deemed spatial access to an urban center to be “absolutely critical,” emphasizing its significance over spatial proximity. Meanwhile, 59% viewed the cost of land as “absolutely critical” or “important” in location decisions.

However, the poll did not explore localization economies, with only 28% considering the clustering of similar firms as “absolutely critical” or “important.”

Proximity to motorways appears crucial for new businesses, according to the findings of this study, as 86% of firms newly established near motorways were located within 10 kilometers, emphasizing the importance of motorway access in their location decisions.

This pattern extends to all sectors combined, with 81% of enterprises that generate jobs being located within ten kilometers of a motorway.

The findings further revealed that public incentives and administrative proximity held minimal influence on business location decisions. Only 20% of surveyed enterprises considered government assistance or proximity to an administrative department an “absolutely important” factor in their relocation or expansion plans.

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