Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/2749 
Year of Publication: 
2001
Citation: 
[Publisher:] ACE Programme Management [Place:] Brüssel [Year:] 2001
Series/Report no.: 
Phare ACE Programme Discussion Paper Series No. 09/1
Publisher: 
ACE Programme Management, Brüssel
Abstract: 
Recent evidence suggests that regional economic integration provides an important stimulus not only to trade, but also to FDI. In contrast, the available theory on FDI does not yet provide empirically testable propositions on the effects of concurrent trade and investment liberalisation. Moreover, given the limits of simulation models, which rely heavily upon parameter choice, in assessing the impact of such liberalisation, there is a need for empirical analysis to identify the principal features of FDI. This paper uses a 'gravity model' approach to assess the impact of the deepening integration between the EU and the CEECs on FDI flows in terms of three key issues. First, we provide systematic estimates of the expected long-term level of FDI in the CEECs. Second, we investigate whether FDI in the CEECs, on the one hand, and source country exports and imports, on the other hand, are complements or substitutes. Finally, we enquire whether an increase in the attractiveness of the CEECs to foreign investors has affected the magnitude of FDI going to other European countries.
JEL: 
F15
F21
F23
Document Type: 
Working Paper
Document Version: 
Digitized Version

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