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European Integration, Foreign Direct Investment (FDI), and the Geography of French Trade

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  • Miren Lafourcade
  • Elisenda Paluzie

Abstract

Lafourcade M. and Paluzie E. European integration, foreign direct investment (FDI), and the geography of French trade, Regional Studies. An augmented gravity model is used to investigate whether the 1978-2000 process of European integration has changed the geography of trade within France, with a particular focus on border regions. It is found that once controlled for bilateral distance, origin- and destination-specific characteristics, French border regions trade on average 73% more with neighbouring countries than predicted by the gravity norm. The regions perform even better if they have good transport connections with these countries. However, French border regions at the periphery of Europe experienced a downward trend over the period that was partly due to the decrease in the propensity of Spanish and Italian foreign affiliates to trade with their home countries. [image omitted] Lafourcade M. et Paluzie E. Integration europeenne, investissement direct etranger (IDE) et geographie du commerce francais, Regional Studies. On emploie un modele de gravite augmente afin d'etudier l'impact du processus d'integration europeenne sur la geographie du commerce international des departements francais, au cours de la periode 1978-2000, en pretant une attention particuliere aux departements frontaliers. Il s'avere que ces derniers commercent en moyenne 1.7 fois plus avec le pays limitrophe que ne le predit la norme de gravite, meme si on tient compte de leur proximite relative, de leurs caracteristiques specifiques et de celles du pays de destination. Les departements dotes d'infrastructures de transport transfrontalieres ont une performance encore superieure. Cet avantage s'est cependant erode sur la periode pour les departements francais frontaliers de la peripherie europeenne, en raison du declin de la propension des filiales espagnoles et italiennes a commercer avec leur pays d'origine. Gravite Regions transfrontalieres Investissement direct etranger (IDE) Infrastructure de transport Lafourcade M. und Paluzie E. Europaische Integration, auslandische Direktinvestitionen und die Geografie des franzosischen Handels, Regional Studies. Wir untersuchen mit Hilfe eines erweiterten Schwerkraftmodells die Frage, ob sich die Handelsgeografie in Frankreich und insbesondere in den Grenzregionen durch den Prozess der europaischen Integration im Zeitraum von 1978 bis 2000 verandert hat. Wir stellen fest, dass franzosische Grenzregionen bei einer Berucksichtigung der bilateralen Entfernung und der ursprungs- und zielspezifischen Merkmale durchschnittlich 73% mehr mit Nachbarlandern handeln als mit Hilfe der Schwerkraftnorm prognostiziert. Die Leistung der Regionen fallt sogar noch hoher aus, wenn sie uber gute Verkehrsverbindungen mit diesen Landern verfugen. Allerdings verzeichneten die franzosischen Grenzregionen in der europaischen Peripherie wahrend dieses Zeitraums einen Abwartstrend, was zum Teil auf die abnehmende Neigung der spanischen und italienischen Schwestergesellschaften zum Handel mit ihren Heimatlandern zuruckzufuhren ist. Schwerkraft Grenzregionen Auslandische Direktinvestitionen Verkehrsinfrastruktur Lafourcade M. y Paluzie E. Integracion europea, inversion extranjera directa (IED) y la geografia del comercio frances, Regional Studies. Utilizamos un modelo de gravedad aumentado para analizar si el proceso de integracion europea entre 1978 y 2000 ha cambiado la geografia del comercio en Francia, especialmente en las regiones fronterizas. Observamos, que una vez controladas la distancia bilateral y las caracteristicas especificas de origen y destino, las regiones fronterizas de Francia comercian con los paises vecinos en promedio un 73% mas de lo que predice la norma de la gravedad. Las regiones dotadas con buenas infraestructuras de transporte transfronterizo tienen incluso un rendimiento superior. Sin embargo, esta ventaja se ha erosionado a lo largo del tiempo, en particular para los departamentos franceses contiguos a la periferia europea, debido a la disminucion de la predisposicion de las filiales espanolas e italianas a comerciar con sus paises de origen. Gravedad Regiones fronterizas Inversion directa extranjera (IDE) Infraestructura de transporte

Suggested Citation

  • Miren Lafourcade & Elisenda Paluzie, 2011. "European Integration, Foreign Direct Investment (FDI), and the Geography of French Trade," Regional Studies, Taylor & Francis Journals, vol. 45(4), pages 419-439.
    • Handle: RePEc:taf:regstd:v:45:y:2011:i:4:p:419-439
    DOI: 10.1080/00343401003713357
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    1. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    2. Riccardo Faini, 2004. "Trade liberalization in a globalizing world," Development Working Papers 192, Centro Studi Luca d'Agliano, University of Milano.
    3. Miren Lafourcade & Elisenda Paluzie, 2008. "European integration, FDI and the geography of French trade," Working Papers halshs-00586834, HAL.
    4. Overman, Henry George & Winters, L. Alan, 2003. "Trade shocks and industrial location: the impact of EEC accession on the UK," LSE Research Online Documents on Economics 121691, London School of Economics and Political Science, LSE Library.
    5. Rosa Forte, 2004. "The relationship between foreign direct investment and international trade. Substitution or complementarity? A survey," FEP Working Papers 140, Universidade do Porto, Faculdade de Economia do Porto.
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    3. Nuria Gallego & Carlos Llano, 2014. "The Border Effect and the Nonlinear Relationship between Trade and Distance," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 1016-1048, November.
    4. Pia Wassmann, 2015. "The Economic Effect of the EU Eastern Enlargement for Border Regions in the Old Member States," ERSA conference papers ersa15p774, European Regional Science Association.
    5. Aleid Brouwer & Tristan Kohl, 2011. "Development of trade blocs in an era of globalization: Proximity still matters," ERSA conference papers ersa11p122, European Regional Science Association.
    6. Wassmann, Pia, 2015. "The Economic Effect of the EU Eastern Enlargement for Border Regions in the Old Member States," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113028, Verein für Socialpolitik / German Economic Association.
    7. Christophe Sohn & Julien Licheron & Evert Meijers, 2022. "Border cities: Out of the shadow," Papers in Regional Science, Wiley Blackwell, vol. 101(2), pages 417-438, April.
    8. Diego Ocampo & Mayra Janet Ortega & Elisenda Paluzie, 2024. "Tariffs and industrial location in Ecuador," UB School of Economics Working Papers 2024/471, University of Barcelona School of Economics.

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