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The Euro Impact on Foreign Direct Investment in EMU Countries

Author

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  • Xenia Florentina Radu

    (City University, London)

Abstract

This paper measures the Euro impact on FDI in Economic and Monetary Union countries, an issue of present concern, taking into account the recent trends of this indicator. This relation is tested with Fixed and Random Effects in a gravity model that includes a difference-in-difference estimator, over the period of 1994-2010. It is obtained a negative effect, the Euro decreasing on average inward FDI by 3,389.523 US dollars million in EMU member countries. Moreover, the paper is approaching a Quantile Regression that provides results of the Euro effect on different percentages of the FDI sample. The outcome of this regression shows that the EMU impact is indeed different across various percentiles, even positive for the first 5% of the FDI data.

Suggested Citation

  • Xenia Florentina Radu, 2013. "The Euro Impact on Foreign Direct Investment in EMU Countries," Working Papers 2, Bucharest Academy of Economic Studies, Research Center in International Business and Economics (RCIBE).
    • Handle: RePEc:bus:wpaper:2
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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