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Economic integration, foreign investment and international trade: the effects of membership of the European Union

Bruno, Randolph Luca, Campos, Nauro, Estrin, Saul and Tian, Meng (2017) Economic integration, foreign investment and international trade: the effects of membership of the European Union. CEP Discussion Papers (CEPDP1518). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

This paper investigates the importance of economic integration in simultaneously fostering foreign direct investment (FDI) and international trade. These have rarely been analyzed jointly using contemporary econometric methods. We estimate the effect of European Union (EU) membership on FDI inflows and trade using annual bilateral data from 34 OECD countries over 1985–2013. We find that EU membership increases FDI inflows by on average 28%. We jointly estimate the impact of EU membership on trade and FDI and find that they are substantial, with the one on trade larger than the one on FDI, in the order of double

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2017 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
JEL classification: F - International Economics > F1 - Trade > F17 - Trade Forecasting and Simulation
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 01 Feb 2018 13:02
Last Modified: 25 Mar 2019 00:04
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/86615

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