Foreign direct investment and the relationship betweenthe United Kingdom and the European Union

Randolph Bruno (), Nauro Campos, Saul Estrin and Meng Tian

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper investigates whether and to what extent foreign direct investment inflows into the United Kingdom are caused by its membership in the European Union (EU). It reports two main sets of econometric estimates: (a) synthetic counterfactual method with annual data for large sample of developing and developed countries over 1970-2014 and (b) gravity estimates using 34 OECD countries bilateral data for 1985-2013. The two sets of estimates strongly concur: EU membership increases FDI inflows by about 30%. This result is robust to changes in specification, country samples, time windows, and the use of different estimators (panel, PPML and Heckman).

Keywords: foreign direct investment; gravity; SMC; European Union (search for similar items in EconPapers)
JEL-codes: J01 L81 R14 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-10
New Economics Papers: this item is included in nep-eec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://eprints.lse.ac.uk/69025/ Open access version. (application/pdf)

Related works:
Working Paper: Foreign direct investment and the relationship between the United Kingdom and the European Union (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:69025

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