Bruno, R;
Estrin, S;
(2020)
Eurozone Membership and Foreign Direct Investment.
In: Andreff, W, (ed.)
Comparative Economic Studies in Europe: A Thirty Year Review.
(pp. 211-226).
Palgrave Macmillan: Cham, Switzerland.
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Abstract
Our aim in this chapter is to estimate the effects of European Monetary Union (EMU) membership on foreign direct investment (FDI). Previous literature on the cross-border impact of a common currency have concentrated on international trade effects. Our analysis is based on the gravity model, which has been successfully applied to explain most forms of bilateral cross-border flows. We estimate a structural gravity model using data for 34 OECD countries between 1985 and 2013 for bilateral FDI. We use a variety of econometric techniques to ensure the robustness of our findings including stock as well as flow measures of FDI and addressing selection issues. Our estimates of the impact of EMU underlines the role of FDI as a channel for benefits from deep economic integration between countries. The effect of EMU membership on FDI is estimated to be significant and positive, at around 130%.
| Type: | Book chapter |
|---|---|
| Title: | Eurozone Membership and Foreign Direct Investment |
| ISBN-13: | 978-3-030-48294-7 |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1007/978-3-030-48295-4_11 |
| Publisher version: | https://doi.org/10.1007/978-3-030-48295-4_11 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Foreign direct investment, Gravity model, European Monetary Union |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10121802 |
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