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

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  • Randolph Bruno
  • Nauro Campos
  • Saul Estrin
  • Meng Tian

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).

Suggested Citation

  • Randolph Bruno & Nauro Campos & Saul Estrin & Meng Tian, 2016. "Foreign direct investment and the relationship between the United Kingdom and the European Union," CEP Discussion Papers dp1453, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1453
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    References listed on IDEAS

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    Cited by:

    1. Balázs Égert, 2021. "Investment in OECD Countries: a Primer," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(2), pages 200-223, June.
    2. Erdey, László & Gáll, József & Márkus, Ádám & Tőkés, Tibor, 2020. "Changes in the trade patterns of the UK in a global perspective," MPRA Paper 98110, University Library of Munich, Germany, revised 21 Jan 2020.
    3. Ansgar Belke & Irina Dubova & Thomas Osowski, 2018. "Policy uncertainty and international financial markets: the case of Brexit," Applied Economics, Taylor & Francis Journals, vol. 50(34-35), pages 3752-3770, July.

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    More about this item

    Keywords

    foreign direct investment; gravity; SMC; European Union;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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