Regional Integration and Foreign Direct Investment

Magnus Blomstrom and Ari Kokko

No 6019, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper deals with the investment effects of regional integration agreements and discusses how such arrangements may affect inward and outward foreign direct investment flows in the integrating region. After setting up a conceptual framework for the analysis, we provide three studies focusing on different kinds of regional integration: North-North integration (Canada joining CUSFTA), North-South integration (Mexico's accession to NAFTA), and South-South integration (MERCOSUR). The main conclusion of the study is that the responses to an integration agreement largely depend on the environmental change brought about by the agreement and the locational advantages of the participating countries and industries. Moreover, the findings suggest that the most positive impact on FDI has occurred when regional integration agreements have coincided with domestic liberalization and macroeconomic stabilization in the member countries.

JEL-codes: F15 F23 (search for similar items in EconPapers)
Date: 1997-04
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (146)

Published as "Foreign District Investment and Employment: Home Country Experience in the United States and Sweden", Economic Journal (1997).
Published as Regions, Globalization and the Knowledge-Based Economy, Dunning, John, ed., Oxford: Oxford University Press, 2000.

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Working Paper: Regional Integration and Foreign Direct Investment (1997)
Working Paper: Regional Integration and Foreign Direct Investment (1997)
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