Analysing major determinants of European FDI into the Mediterranean countries

Lucie M. Weissleder and Thomas Heckelei

No 44053, 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists

Abstract: Foreign direct investment (FDI) is known as a very relevant driver of economic growth and has found increased attention in recent trade research. Existing theories differ, however, in their conclusion regarding the relation between trade in goods and FDI: they appear to be either complements or substitutes depending on the theory applied and specific country conditions. Benefits or losses for individual member countries resulting from these different relationships are relevant for evaluating the effects of regional trade areas as established by the Euro-Mediterranean Partnership. This paper offers an empirical analysis of the connection between trade and FDI flows in the agribusiness sector in the context of the Euro-Mediterranean partnership. It contributes to the limited literature in this area by providing an overview on relevant theories and their conclusion on the relationship between trade and FDI. Determinants implied by the single theories are identified and reasonable proxies derived for the carried out econometric analysis. The empirical analysis shows mixed evidence on the complementary or substitutive relationship of FDI and trade in agricultural goods. For comparison and better interpretation of determinants’ impacts identified by the econometric analysis, a further analysis between the EU15 and the Mercosur countries is carried out. Finally, further research needs in this area of trade analyses are identified for the specific case of the Euro-Mediterranean Partnership.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 12
Date: 2008
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/44053/files/337.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae08:44053

DOI: 10.22004/ag.econ.44053

Access Statistics for this paper

More papers in 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().