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The Impact Of Taxation On Investment Financing: The Case Of Moroccan Small And Medium-Sized Enterprises

Author

Listed:
  • Toufik Marmad

    (University Mohammed V)

  • Ritahi Oussama

    (University Hassan II)

  • Echaoui Abdellah

    (University Mohammed V)

Abstract

Small and medium-sized enterprises (SMEs) are pivotal to investment, employment, and economic growth in developing economies. However, their financing decisions are often influenced by complex tax environments that can either encourage or hinder investment. This study investigates the impact of taxation on the investment financing decisions of Moroccan SMEs, focusing on three fiscal dimensions: tax pressure, fiscal incentives, and the tax treatment of financing modes. A quantitative survey was conducted between March 2024 and October 2024 among 390 SMEs operating in various sectors across Morocco. Data were collected through a structured questionnaire and analyzed using partial least squares structural equation modeling (PLS-SEM). The findings show that all three tax-related factors significantly and positively affect financing decisions, with fiscal incentives and tax treatment exerting the strongest influence. These results emphasize the strategic role of tax policy in shaping SME financial behavior and offer actionable insights for policymakers aiming to enhance private sector investment and support SME development.

Suggested Citation

  • Toufik Marmad & Ritahi Oussama & Echaoui Abdellah, 2025. "The Impact Of Taxation On Investment Financing: The Case Of Moroccan Small And Medium-Sized Enterprises," Business Management, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 3 Year 20, pages 19-43.
    • Handle: RePEc:dat:bmngmt:y:2025:i:3:p:19-43
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    File URL: http://hdl.handle.net/10610/5207
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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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