Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227195
Authors: 
Bruno, Randolph Luca
Campos, Nauro F.
Estrin, Saul
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13668
Abstract: 
This paper explores the impact of EU membership on foreign direct investment (FDI). It analyses empirically how the effects of such deep integration differ from other forms and investigates what drives these effects. Using a structural gravity framework on annual bilateral FDI data for almost every country in the world, over 1985-2018, we find EU membership leads FDI into the host economy to be about 60% higher for investment from outside the EU, and around 50% higher for intra-EU FDI. Moreover, we find that the effect of EU membership on FDI is larger than from membership of NAFTA, EFTA, or MERCOSUR, and that the Single Market is the cornerstone of this differential impact.
Subjects: 
European Union
foreign direct investment
economic integration
Structural Gravity Model
single market
JEL: 
F21
F36
O52
Document Type: 
Working Paper

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