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On the Extensive and Intensive FDI Margins: Does European Cohesion Policy Matter?

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  • Lubica Stiblarova
  • Benoit Dicharry

Abstract

This paper contributes to the literature discussing the effects of the European Cohesion Policy (ECP) on recipients’ foreign direct investment (FDI). Unlike previous studies, we closely examine the ECP effects not only on total FDI but also on both the extensive and intensive FDI margins. The analysis on the EU 28 countries, conducted using system GMM estimation, suggests ECP plays a role in promoting FDI on the extensive margin only. Moreover, the ECP’s positive marginal effect on total FDI is neutralized in the Central and Eastern European (CEE) countries, implying an increase in their attractiveness through other ways than implementing market-oriented structural reforms.

Suggested Citation

  • Lubica Stiblarova & Benoit Dicharry, 2021. "On the Extensive and Intensive FDI Margins: Does European Cohesion Policy Matter?," Eastern European Economics, Taylor & Francis Journals, vol. 59(4), pages 334-359, July.
    • Handle: RePEc:mes:eaeuec:v:59:y:2021:i:4:p:334-359
    DOI: 10.1080/00128775.2021.1927757
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