EU Membership and FDI: Is There an Endogenous Credibility Effect?

Stojkov, Aleksandar; Warin, Thierry

doi:10.1080/10669868.2018.1431579

Cited by 5 publications

(4 citation statements)

References 40 publications

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“…The size of the economy as a determinant of FDI is according to the theory of economic scale. The results of this study support the prior studies conducted by Rezac (2014); Sousa & Lochard (2006); Stojkov & Warin (2018); Biro et al (2019), who mainly states that the bigger the size of an economy is, the higher the FDI increases.…”

Section: Resultssupporting

confidence: 91%

Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

Wahyuningsih

2021

JES

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This study aims to determine the effects of ASEAN economic integration on the manufacturing sector's trade flow and foreign direct investment. This study using panel data regression. The results show that ASEAN economic integration affects trade in the manufacturing sector and foreign direct investment (FDI) in ASEAN member countries. The tariff elimination policy increased trade flows in the manufacturing sector and foreign direct investment. The variable of GDP has a positive and significant effect on the manufacturing sector's trade flows and foreign direct investment. Exchange rate variables have a negative and significant effect on trade flows in the manufacturing sector and foreign direct investment. Meanwhile, the distance variable negatively affects trade in the manufacturing sector, but it does not affect foreign direct investment.

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Section: Resultssupporting

confidence: 91%

Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

Wahyuningsih

2021

JES

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“…Traditionally, the accurate measurement of FDI has proven to be particularly difficult. Stojkov and Warin (2018) for instance note the large statistical discrepancies between the various official FDI data series. Moreover, more recently, the significantly changing landscape of corporate legal forms and financial accounting, have made it even more difficult to accurately measure "genuine" FDI and to correctly match the origin of the direct investor to the direct investment recipient country.…”

Section: Data Issues: Fdi Datamentioning

confidence: 99%

“…The consensus emerging from this literature is that the euro has been pro-FDI, in particular as regards intra FDI flows, i.e. flows among monetary union countries (see Baldwin et al (2008) for a review of the earlier literature and Stojkov and Warin (2018) for a more recent study). 6 In more details, Baldwin et al (2008) and Neary (2009) suggest that the Single Market programme and the euro adoption should be positive for intra-euro area vertical FDI (due to the pro trade effects of the Single Market integration and euro adoption) but should discourage intra-euro area horizontal FDI (as the single currency and Single Market integration reduce trade costs).…”

Section: Introductionmentioning

confidence: 99%

Did the Euro Change the Nature of FDI Flows among Member States?

Sondermann

Vansteenkiste

2019

SSRN Journal

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In this paper we investigate the impact of the euro integration process on the drivers of FDI inflows. We show theoretically and empirically that the single currency alters the drivers of FDI inflows across its Member States. Estimating bilateral gravity models of FDI inflows into euro area countries, we show that the euro facilitates intra-euro area vertical FDI flows but reduces incentives for horizontal or market seeking FDI. Instead, horizontal FDI flows stemming from investor countries located outside the monetary union increase. Such flows are however not more likely be directed towards euro area countries with larger domestic markets but rather to countries that are close to large euro area markets and that have higher quality institutions. Overall, these results suggest that while the euro has been beneficial to FDI inflows into the monetary union, the impact differs significantly across countries. The global financial crisis does not change our main findings. Our results are robust to various economic specifications.

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“…Carril-Caccia and Pavlova (2018), Baldwin et al (2008), Neary (2009), Stojkov and Warin (2018), Flam andNordstrom (2008), Brouwer et al (2008), De Sousa and Lochard (2011), Sondermann and Vansteenkiste (2019), Petroulas (2007), Straathof et al (2008), Camarero et al (2019) and Kox and Rojas-Romagosa (2019) EIA database elaborated by Baier and Bergstrand (2007) Market size and population Brainard (1997), Carr et al (2001), Bergstrand andEgger (2007), Head and Mayer (2004), Blonigen et al (2007), Martí et al (2017) Markusen et al (1996), Markusen andVenables (1999, 2000), Markusen and Maskus (2002), Blonigen et al (2003),…”

Section: Economic and Monetary Integrationmentioning

confidence: 99%

Is there a euro effect in the drivers of US FDI? New evidence using Bayesian model averaging techniques

2021

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In this paper we analyze the potential determinants of US outward FDI stock with a particular focus on the euro effect during the period 1985-2017. To this aim, we consider a large set of candidate variables suggested both theory and previous empirical analysis. We select the covariates using Bayesian Model Averaging (BMA), a data-driven methodology. Our sample includes a total of 56 host countries, that represent around the 70% of US outward FDI stock. We study the role of the euro on American FDI both in Europe and the rest of the world. In Europe, we consider various country groups: the European Union (EU), the Euro Area (EA), as well as core and periphery within this last group. We conclude that many variables studied by previous FDI literature cannot be considered robust determinants. Moreover, US OFDI is explained by both horizontal and vertical motives. However, HFDI strategies predominate in EA core countries, whereas VFDI prevails in the periphery. As for the euro effect, the common currency seems to have played an important role encouraging US FDI, being a crucial element in the convergence of EA periphery to its core. In addition, our results indicate that the adoption of the euro has favoured VFDI to the detriment of HFDI.

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EU Membership and FDI: Is There an Endogenous Credibility Effect?

Cited by 5 publications

References 40 publications

Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

Did the Euro Change the Nature of FDI Flows among Member States?

Is there a euro effect in the drivers of US FDI? New evidence using Bayesian model averaging techniques

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