{"title":"How EU membership affects foreign direct investment: Differences between EU15 and CEE countries","authors":"Bettina Meinhart","doi":"10.1111/twec.13541","DOIUrl":null,"url":null,"abstract":"This article examines the impact of membership in the European Union (EU) on foreign direct investments (FDI). In contrast to previous studies, the overall effect of EU membership is disaggregated by countries that joined the EU before 2004 (EU15) and those that joined after 2004 [Central and Eastern European (CEE)]. This disaggregation is motivated by differences between the two groups in terms of their historical background, GDP levels and motives for FDI. Furthermore, the effects of EU membership are estimated at the country level. Using a structural FDI gravity model and applying recent advances in the gravity estimation literature, it is shown that membership of the EU has a substantial positive impact on both inward and outward FDI stocks. In particular, there is considerable heterogeneity in the impact of EU membership, with EU15 countries experiencing mainly an increase in inward FDI, while CEE countries experience a surge in outward FDI.","PeriodicalId":48147,"journal":{"name":"World Economy","volume":"20 1","pages":""},"PeriodicalIF":2.6000,"publicationDate":"2023-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"World Economy","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1111/twec.13541","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This article examines the impact of membership in the European Union (EU) on foreign direct investments (FDI). In contrast to previous studies, the overall effect of EU membership is disaggregated by countries that joined the EU before 2004 (EU15) and those that joined after 2004 [Central and Eastern European (CEE)]. This disaggregation is motivated by differences between the two groups in terms of their historical background, GDP levels and motives for FDI. Furthermore, the effects of EU membership are estimated at the country level. Using a structural FDI gravity model and applying recent advances in the gravity estimation literature, it is shown that membership of the EU has a substantial positive impact on both inward and outward FDI stocks. In particular, there is considerable heterogeneity in the impact of EU membership, with EU15 countries experiencing mainly an increase in inward FDI, while CEE countries experience a surge in outward FDI.
期刊介绍:
The World Economy is a vital resource for researchers, analysts and policy-advisors interested in trade policy and other open economy issues embracing international trade and the environment, international finance, and trade and development. The journal also considers related areas such as economies in transition and development economics, making The World Economy an essential reference for in-depth knowledge on and up-to-date coverage of international economic relations.