 A Gravity Model Analysis of FDI across EU Member StatesJournal of Economic Integration, 2020, vol. 35, issue 3, 426-456 Abstract: While recent debates about European integration focus mainly on the losses from dissolutions, a remarkable rise in foreign direct investment (FDI) in the accession countries has become increasingly evident as a benefit of the European Union (EU) membership, which makes EU membership a key FDI determinant.B y applying an augmented gravity model (rather than standard gravity variables), covering 39 host and home countries over 1991-2017, we investigated specific factors in explaining FDI inflows, with a focus on the new member EU states.E mpirically, we created a series of ordinary least squares and Poisson Pseudo-Maximum-Likelihood models to account for all country-time-specific and country-pair factors.T his paper verifies that EU membership has a positive and significant effect on FDI, between 1991 and 2017 FDI inflows became greater, on average, by approximately 23%.A fter EU enlargement, more FDI came from EU members to the new EU member countries and less came from non-EU member countries. Keywords: FDI; new member EU states (NMS); zero flows; fixed effects; Chinese investment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0805 Access Statistics for this article Journal of Economic Integration is currently edited by Seongeun Kim More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC. |
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