Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

European Regional Integration and Foreign Direct Investment Flows to Joining Countries

Hoti, Erudita LU and Alfsdotter, Josabeth LU (2010) NEKM01 20102
Department of Economics
Abstract
This paper studies the determinants of foreign direct investment in the countries that joined the EU from 1985 to today, and the impact of EU membership on their Bilateral FDI inflows from all OECD countries. The empirical method used is the gravity model, extended with additional explanatory variables, and the econometric models used are pooled OLS, a panel FE model and the FE Poisson model. We find that GDP’s of host and source countries, the distance between them, common language and common border all play important roles in determining bilateral FDI
flows in our sample. We also find some support for labor costs of host and source countries, their openness to trade and inflation level in host country, although these results are mixed... (More)
This paper studies the determinants of foreign direct investment in the countries that joined the EU from 1985 to today, and the impact of EU membership on their Bilateral FDI inflows from all OECD countries. The empirical method used is the gravity model, extended with additional explanatory variables, and the econometric models used are pooled OLS, a panel FE model and the FE Poisson model. We find that GDP’s of host and source countries, the distance between them, common language and common border all play important roles in determining bilateral FDI
flows in our sample. We also find some support for labor costs of host and source countries, their openness to trade and inflation level in host country, although these results are mixed and depend on the econometric models used. Last but not least it is found that EU-membership has had a strong effect on intra-EU FDI flows, and has also affected the general level of FDI inflows from all OECD countries. (Less)
Please use this url to cite or link to this publication:
author
Hoti, Erudita LU and Alfsdotter, Josabeth LU
supervisor
organization
course
NEKM01 20102
year
type
H1 - Master's Degree (One Year)
subject
keywords
fixed effects, gravity model, EU, Foreign direct investments, regional integration agreement
language
English
id
1710498
date added to LUP
2010-11-05 11:55:22
date last changed
2010-11-05 11:55:22
@misc{1710498,
  abstract     = {{This paper studies the determinants of foreign direct investment in the countries that joined the EU from 1985 to today, and the impact of EU membership on their Bilateral FDI inflows from all OECD countries. The empirical method used is the gravity model, extended with additional explanatory variables, and the econometric models used are pooled OLS, a panel FE model and the FE Poisson model. We find that GDP’s of host and source countries, the distance between them, common language and common border all play important roles in determining bilateral FDI
flows in our sample. We also find some support for labor costs of host and source countries, their openness to trade and inflation level in host country, although these results are mixed and depend on the econometric models used. Last but not least it is found that EU-membership has had a strong effect on intra-EU FDI flows, and has also affected the general level of FDI inflows from all OECD countries.}},
  author       = {{Hoti, Erudita and Alfsdotter, Josabeth}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{European Regional Integration and Foreign Direct Investment Flows to Joining Countries}},
  year         = {{2010}},
}