The 'core-periphery' pattern of FDI-led growth and production structure in the EU

Constantina Kottaridi

Applied Economics, 2005, vol. 37, issue 1, 99-113

Abstract: The present study attempts to shed light on a central and under-investigated issue in the European integration debate, referring to the impact of foreign direct investment (FDI) in the growth process of EU countries and detecting the channels through which FDI can interact with host characteristics to raise income levels. Using an advanced econometric approach, i.e., the Arellano-Bond dynamic panel data estimation, it predicts a 'core-periphery' growth pattern, attributed to initial strengths and weaknesses of the regions, which, in turn, are responsible for attracting different types of foreign activity. Policy implications as to the provision of appropriate investment incentives and the development of a strong human resources base in periphery are then raised, in order for it to be able to compete internationally as a host to technology-based investments and reap the benefits associated with knowledge transfer.

Date: 2005
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DOI: 10.1080/0003684042000291308

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