Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34773 
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dc.contributor.authorWarin, Thierryen
dc.contributor.authorWunnava, Phanindra V.en
dc.contributor.authorJanicki, Hubert P.en
dc.date.accessioned2008-10-14-
dc.date.accessioned2010-07-07T11:28:49Z-
dc.date.available2010-07-07T11:28:49Z-
dc.date.issued2008-
dc.identifier.piurn:nbn:de:101:1-2008101543en
dc.identifier.urihttp://hdl.handle.net/10419/34773-
dc.description.abstractThis paper presents an empirical assessment of the endogenous optimum currency area theory. Frankel and Rose (1998) study the endogeneity of a currency union through the lens of international trade flows. Our study extends Frankel and Rose's model by using FDI flows to test the original theory developed by Mundell in 1973. A gravity model is used to empirically assess the effectiveness of the convergence criteria by examining location specific advantages that guide multinational investment within the European Union. A fixed effects model based on a panel data of foreign direct investment (FDI) flows within the EU-15 shows that horizontal investment promotes the diffusion of the production process across the national border. Specifically, our results suggest that economic convergence ensured by belonging to the common currency area helps double FDI flows.en
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x3739en
dc.subject.jelC23en
dc.subject.ddc330en
dc.subject.keywordEconomic integrationen
dc.subject.keywordgravity modelen
dc.subject.keywordendogenous optimum currency areaen
dc.subject.stwOptimaler Währungsraumen
dc.subject.stwDirektinvestitionen
dc.subject.stwGravitationsmodellen
dc.subject.stwEntwicklungskonvergenzen
dc.subject.stwEuropäische Wirtschafts- und Währungsunionen
dc.subject.stwEU-Staatenen
dc.titleTesting mundell's intuition of endogenous OCA theory-
dc.type|aWorking Paperen
dc.identifier.ppn581772873en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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