Regional Integration and Foreign Direct Investment
AbstractThis paper deals with the investment effects of regional integration agreements and discusses how such arrangements may affect inward and outward foreign direct investment (FDI) flows in the integrating region. After setting up a conceptual framework for the analysis, we provide three studies focusing on different kinds of regional integration: North-North integration (Canada joining CUSFTA), North-South integration (Mexico’s accession to NAFTA), and South-South integration (MERCOSUR). The main conclusion of the study is that the responses to an integration agreement largely depend on the environmental change brought about by the agreement and the locational advantages of the participating countries and industries. Moreover, the findings suggest that the most positive impact on FDI has occurred when regional integration agreements have coincided with domestic liberalization and macroeconomic stabilization in the member countries.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1659.
Date of creation: Jun 1997
Date of revision:
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Other versions of this item:
- Magnus Blomstrom & Ari Kokko, 1997. "Regional Integration and Foreign Direct Investment," NBER Working Papers 6019, National Bureau of Economic Research, Inc.
- Blomström, Magnus & Kokko, Ari, 1997. "Regional Integration and Foreign Direct Investment," Working Paper Series in Economics and Finance 172, Stockholm School of Economics.
- F15 - International Economics - - Trade - - - Economic Integration
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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