Regional Economic Integration and Foreign Direct Investment: The Case of German Investment in Europe

Pain, Nigel; Lansbury, Melanie

doi:10.1177/002795019716000107

Cited by 46 publications

(36 citation statements)

References 15 publications

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“…The above determinants are also tested by Jost (1997), Martin andVelázquez (1997), Pain andLansbury (1997) and Wheeler and Mody (1992). In Jost's model for Germany, relative GDP and unit labour costs account for around 70% of changes in Germany's share of outflows from 14 OECD countries.…”

Section: Principal Determinants Of Fdismentioning

confidence: 99%

Foreign Direct Investment and Employment in the Industrial Countries

Andersen¹,

Hainaut

1998

SSRN Journal

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Fax: +41 61 / 280 91 00 and +41 61 / 280 81 00This publication is available on the BIS website at www.bis.org. Since the trough in 1982, the growth of real foreign direct investment (FDI) outflows and inflows for the OECD countries has been very high, far outpacing that of foreign trade and real GDP. While such flows are likely to have increased the efficiency with which global capital is being used, they have also led to concerns that outflows from the industrial countries serve as an instrument for exporting jobs to low-wage countries. The purpose of this paper is to look for evidence regarding the precise relationship between FDI outflows and employment in the source countries. The empirical evidence mostly relies on estimated relationships between FDI flows and various components of demand but is derived from time-series analyses for individual countries as well as from panel regressions. All in all, we find only limited evidence that FDI outflows lead to job losses in the source countries. While it is true that domestic investment tends to decline in response to FDI outflows, emerging market economies receive only a small, albeit growing, share of global outflows. It also appears that high labour costs encourage outflows and that exchange rate movements may exacerbate such effects. However, the principal determinants of FDI flows are prior trade patterns, IT-related investments and the scope for cross-border mergers and acquisitions. Moreover, there is clear evidence that, by improving distribution and sales channels, FDI outflows complement rather than substitute for exports and thus help protect rather than destroy jobs in the source countries. © Bank for* Without implication we acknowledge comments on an earlier draft by R. Lipsey and participants in seminars at York University, the Deutsche Bundesbank and the Bank of Canada. We would also like to thank S. Arthur for overseeing the publication and L. Morandini for expert secretarial assistance well beyond her call of duty.

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Section: Principal Determinants Of Fdismentioning

confidence: 99%

Foreign Direct Investment and Employment in the Industrial Countries

Andersen¹,

Hainaut

1998

SSRN Journal

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“…Focusing on inter-regional FDI, Pain and Lansbury (1997) also argue that German investment in the EU has, on average across sectors and countries, been higher since 1987 than might otherwise have been expected, although there is evidence of considerable variation across countries. 9 In a related study, Pain (1997) focuses on the determinants of intra-EU FDI from the United Kingdom.…”

Section: Empirical Evidencementioning

confidence: 98%

“…The upsurge in Japanese investment in Europe has attracted recent attention and the conclusion seems to be that those investments have increased as a consequence of the 1992 program in response to both the opportunities and threats created by the integration process (Thomsen andNicholaides, 1991, andBalasubramauyam andGreenaway, 1992). More recently, Pain and Lansbury (1997) cite some evidence that the Internal Market process of the EU may have diverted investment into the EU at the expense of other locations. Specifically, the level of inward investment in Europe by U.S. and Japanese firms has been significantly higher since 1987 than might otherwise have been expected.…”

Section: Empirical Evidencementioning

confidence: 99%

26 The North American Experience

Nnadi¹

2016

Early Onset Scoliosis

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This paper examines the relationship between regional economic integration and FDI in North America, where two RIAs have been established over the past decade: a bilateral free trade agreement between Canada and the U.S. (CUSTA) and a trilateral agreement (NAFTA) incorporating Mexico as well. The North American experiences suggest substantially more modest impacts of regional trade agreements on intra-regional trade creation and extraregional FDI stimulation than is associated with the earlier stages of EU integration. At the same time, there is support for the European findings that trade and investment impacts will differ across countries within the integrating region. These results serve as a caution against generalizing from earlier experience when forecasting the impacts of expanded economic integration within Europe or the Americas. The consequences of regional economic integration are sufficiently conditioned by inherited policies, as well as by existing macroeconomic conditions, to make extrapolation from historical experience very risky and potentially misleading.JEL classification: F02, F21, F23

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“…A number of empirical approaches examined the total stock and flow of FDI in accordance with the market-size and efficiency-gains hypothesis (Brenton, 1996;Clegg, 1999;Dunning, 1997b;Pain & Lansbury, 1997). Nevertheless, existing empirical studies mainly focused on US and Japanese FDI in the European Union (EU).…”

Section: Introductionmentioning

confidence: 99%

How Different are Emerging Multinationals' Views of Economic Integration in Europe? A Case Study of Korean Automobile Manufacturers' Strategic Reactions

Hyun

2008

European Planning Studies

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This study is a survey of Korean automobile manufacturers in Europe, which examines the different perceptions of emerging multinationals to economic integration and the subsequent strategic reactions relating to their particular characteristics. The findings show dissimilar patterns and motivations for Korean automotive foreign direct investment (FDI) when compared to those of established multinationals, which are conceptualized as a pre-emptive strategic advance, particularly in relation to the changing ownership endowments and negative perceptions of the single European market. These finding imply that conventional variables are unlikely to be applicable to emerging multinationals and show the need to segregate them from other multinationals when formulating industrial policies and firm-level competing strategies.

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Regional Economic Integration and Foreign Direct Investment: The Case of German Investment in Europe

Cited by 46 publications

References 15 publications

Foreign Direct Investment and Employment in the Industrial Countries

Foreign Direct Investment and Employment in the Industrial Countries

26 The North American Experience

How Different are Emerging Multinationals' Views of Economic Integration in Europe? A Case Study of Korean Automobile Manufacturers' Strategic Reactions

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