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Does economic integration affect FDI inflows to member countries equally? An empirical analysis for Europe

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  • Olivia Galgau
  • Khalid Sekkat

Abstract

The paper investigates whether the impact of the Single Market Program (SMP) on FDI inflows to Europe is different across member countries and tries to highlight potential explanations. One of them being related to countries’ specialization, the investigation is also conducted at the sector level. The results show that the impact of the SMP differs across countries and sectors. However, the industrial specialization story does not seem to be the right explanation to the differences across countries. Further investigation suggests that the functioning of institutions constitutes a better explanation. Hence, further benefits from the SMP in terms re-allocation of activities can be expected provided additional reforms are adopted.

Suggested Citation

  • Olivia Galgau & Khalid Sekkat, 2004. "Does economic integration affect FDI inflows to member countries equally? An empirical analysis for Europe," Working Papers CEB 04-025.RS, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:04-025
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    References listed on IDEAS

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    More about this item

    Keywords

    FDI; Economic integration; The European Union.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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