Economic integration, border costs and FDI location: Evidence from the fifth European Union enlargement

Jonathan Jones, Ilona Serwicka and Colin Wren

International Review of Economics & Finance, 2018, vol. 54, issue C, 193-205

Abstract: Little is known about the effect of border costs on FDI location. This paper explores this for the fifth European Union (EU) enlargement that integrated the ten Central and Eastern European countries (CEECs). It regresses count data for 35,105 FDI projects locating in 25 European countries over the period 1997–2010. Four EU accession events are examined for the more- and less-liberalized CEECs. It finds that the lower border costs doubled FDI in the CEECs at EU membership, of which 60% is diverted from the ‘old’ Europe. This membership effect is three-times greater for the more-liberalized countries, for which earlier accession events are unimportant.

Keywords: FDI location; Border costs; Economic integration; European enlargement; Central and Eastern European Countries (search for similar items in EconPapers)
JEL-codes: F15 F21 P33 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:54:y:2018:i:c:p:193-205

DOI: 10.1016/j.iref.2017.08.007

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