Economic integration, border costs and FDI location: evidence from the fifth European enlargement

Jones, Jonathan, Serwicka, Ilona and Wren, Colin (2017) Economic integration, border costs and FDI location: evidence from the fifth European enlargement. International Review of Economics & Finance, 54. pp. 193-205. ISSN 1059-0560

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Abstract

Little is known about the effect of border costs on FDI location. This paper explores this for the fifth European Union (EU) enlargement that integrated the ten Central and Eastern European countries (CEECs). It regresses count data for 35,105 FDI projects locating in 25 European countries over the period 1997–2010. Four EU accession events are examined for the more- and less-liberalized CEECs. It finds that the lower border costs doubled FDI in the CEECs at EU membership, of which 60% is diverted from the ‘old’ Europe. This membership effect is threetimes greater for the more-liberalized countries, for which earlier accession events are unimportant.

Item Type: Article
Keywords: FDI location; Border costs; Economic integration; European enlargement; Central and Eastern European Countries
Schools and Departments: School of Business, Management and Economics > Economics
Depositing User: Ilona Serwicka
Date Deposited: 26 Mar 2018 08:55
Last Modified: 06 Apr 2018 08:41
URI: http://sro.sussex.ac.uk/id/eprint/69940

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