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Does the East Get What Would Otherwise Flow to the South? FDI Diversion in Europe

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Author Info

  • Claudia M. Buch
  • Robert M. Kokta
  • Daniel Piazolo

Abstract

This paper examines the FDI flows towards two regions in the periphery of Europe: the Central and Eastern European countries (CEECs) and the countries of Southern Europe. We investigate whether evidence exists for FDI diversion from Southern Europe to the CEECs. A cursory observation of recent FDI trends might give rise to such claims of diversion. On the basis of gravity model equations, this paper compares the expected and actual FDI figures. The findings lead us to conclude that there is no evidence of FDI diversion between these two regions.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1061.

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Length: 43 pages
Date of creation: Jul 2001
Date of revision:
Handle: RePEc:kie:kieliw:1061

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Related research

Keywords: European Integration; Transition Economies; FDI; Gravity Model.;

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References

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  6. Buch, Claudia M. & Piazolo, Daniel, 2001. "Capital and trade flows in Europe and the impact of enlargement," Economic Systems, Elsevier, vol. 25(3), pages 183-214, September.
  7. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier.
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Citations

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Cited by:
  1. Garmel, Kateryna & Maliar, Lilia & Maliar, Serguei, 2008. "EU eastern enlargement and foreign investment: Implications from a neoclassical growth model," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 307-325, June.
  2. J. Caetano & A. Galego & E. Vaz & C. Vieira & I. Vieira, 2002. "The Eastward Enlargement of the Eurozone: Trade and FDI," Eastward Enlargement of the Euro-zone Working Papers wp07, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Aug 2002.
  3. Bevan, Alan A. & Estrin, Saul, 2004. "The determinants of foreign direct investment into European transition economies," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 775-787, December.
  4. Bos,J.W.B. & Laar,M.,van de, 2004. "Explaining Foreign Direct Investment in Central and Eastern Europe: an Extended Gravitiy Approach," Research Memorandum 041, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  5. Josef C. Brada & Ali M. Kutan & Taner M. Yigit, 2004. "The Effects of Transition and Political Instability On Foreign Direct Investment Inflows: Central Europe and the Balkans," William Davidson Institute Working Papers Series wp729, William Davidson Institute at the University of Michigan.
  6. Hubert Janicki & Phanindra Wunnava, 2004. "Determinants of foreign direct investment: empirical evidence from EU accession candidates," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 505-509.
  7. Peter Nunnenkamp, 2002. "Die Auswirkungen der EU-Osterweiterung auf die Direktinvestitionen und deren Rückwirkungen," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 55(11), pages 13-19, 06.
  8. Kayam, Saime Suna & Hisarciklilar, Mehtap, 2009. "Determinants of Turkish FDI abroad," MPRA Paper 17813, University Library of Munich, Germany.
  9. Daniel Lederman & William F. Maloney & Luis Servén, 2004. "Lessons from NAFTA for Latin America and the Caribbean," World Bank Publications, The World Bank, number 14457, October.
  10. Lilia Maliar & Kateryna Garmel & Serguei Maliar, 2005. "The Eu Eastern Enlargement And Fdi: The Implications From A Neoclassical Growth Model," Working Papers. Serie AD 2005-29, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  11. Jungnickel, Rolf & Borrmann, Christine & Keller, Dietmar, 2005. "What gravity models can tell us about the position of German FDI in Central and Eastern Europe," HWWA Discussion Papers 328, Hamburg Institute of International Economics (HWWA).
  12. Gohou, Gaston & Soumaré, Issouf, 2012. "Does Foreign Direct Investment Reduce Poverty in Africa and are There Regional Differences?," World Development, Elsevier, vol. 40(1), pages 75-95.
  13. Wim Van Aken & Ricardo Lago & Clemens Grafe, 2003. "Quelques coûts et bénéfices de l’adhésion à l’Union européenne : les aspects économiques de leur distribution," Revue d'Économie Financière, Programme National Persée, vol. 72(3), pages 45-72.
  14. Esiyok, Bulent, 2011. "Determinants of foreign direct investment in Turkey: a panel study approach," MPRA Paper 36568, University Library of Munich, Germany.
  15. Ludo Cuyvers & Michel Dumont & Glenn Rayp & Katrien Stevens, 2005. "Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries," Open Economies Review, Springer, vol. 16(2), pages 153-174, April.
  16. Nunnenkamp, Peter, 2002. "Auswirkungen der EU-Osterweiterung auf die Direktinvestitionen und die Rückwirkungen der Direktinvestitionen," Open Access Publications from Kiel Institute for the World Economy 2904, Kiel Institute for the World Economy (IfW).
  17. Frenkel, Michael & Funke, Katja & Stadtmann, Georg, 2004. "A panel analysis of bilateral FDI flows to emerging economies," Economic Systems, Elsevier, vol. 28(3), pages 281-300, September.

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