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The 'core-periphery' pattern of FDI-led growth and production structure in the EU

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  • Constantina Kottaridi

Abstract

The present study attempts to shed light on a central and under-investigated issue in the European integration debate, referring to the impact of foreign direct investment (FDI) in the growth process of EU countries and detecting the channels through which FDI can interact with host characteristics to raise income levels. Using an advanced econometric approach, i.e., the Arellano-Bond dynamic panel data estimation, it predicts a 'core-periphery' growth pattern, attributed to initial strengths and weaknesses of the regions, which, in turn, are responsible for attracting different types of foreign activity. Policy implications as to the provision of appropriate investment incentives and the development of a strong human resources base in periphery are then raised, in order for it to be able to compete internationally as a host to technology-based investments and reap the benefits associated with knowledge transfer.

Suggested Citation

  • Constantina Kottaridi, 2005. "The 'core-periphery' pattern of FDI-led growth and production structure in the EU," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 99-113.
  • Handle: RePEc:taf:applec:v:37:y:2005:i:1:p:99-113
    DOI: 10.1080/0003684042000291308
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    2. Erdinc Telatar & Funda Telatar & Tarkan Cavusoglu & Umur Tosun, 2010. "Political instability, political freedom and inflation," Applied Economics, Taylor & Francis Journals, vol. 42(30), pages 3839-3847.
    3. Riccardo Crescenzi & Kerwin Datu & Simona Iammarino, 2016. "European Cities and Foreign Investment Networks," Papers in Evolutionary Economic Geography (PEEG) 1616, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2016.
    4. Narula, Rajneesh & Van der Straaten, Khadija, 2019. "A comment on the multifaceted relationship between multinational enterprises and within-country inequality," MERIT Working Papers 2019-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Völlmecke, Dominik & Jindra, Björn & Marek, Philipp, 2016. "FDI, human capital and income convergence—Evidence for European regions," Economic Systems, Elsevier, vol. 40(2), pages 288-307.
    6. Benito, Gabriel & Narula, Rajneesh, 2007. "States and Firms on the Periphery: The Challenges of a Globalising World," MERIT Working Papers 2007-004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Kottaridi, Constantina & Stengos, Thanasis, 2010. "Foreign direct investment, human capital and non-linearities in economic growth," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 858-871, September.
    8. Valter Di Giacinto, 2013. "The dynamics of knowledge production in European regions," ERSA conference papers ersa13p543, European Regional Science Association.
    9. Grahame Fallon & Mark Cook, 2014. "Explaining Manufacturing and Non-Manufacturing Inbound FDI Location in Five UK Regions," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 105(3), pages 331-348, July.
    10. Tarkan Cavusoglu, 2009. "Growth effects of currency mismatches: evidence from emerging economies," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1677-1690.
    11. Barry, Frank & Walsh, Frank, 2008. "Gains and losses from sectoral relocation: A review of theory and empirics," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 4-16, March.

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