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Is FDI into China Crowding Out FDI into the European Union?

Author

Listed:
  • Resmini, Laura
  • Siedschlag, Iulia

    (Economic and Social Research Institute (ESRI))

Abstract

We estimate an augmented gravity panel model to analyse the effects of FDI into China originating in OECD countries on FDI into EU and other countries over the period 1990-2004. Our results suggest that on average, ceteris paribus, over the analysed period, FDI inflows into China have been complementary to FDI inflows into EU15 countries but they have substituted FDI into the new EU countries in Central and Eastern Europe. In particular, small economies such as Bulgaria and the Baltic countries have been affected negatively by the surge in the FDI into China. This FDI diversion appears in the case of efficiency-seeking FDI.

Suggested Citation

  • Resmini, Laura & Siedschlag, Iulia, 2008. "Is FDI into China Crowding Out FDI into the European Union?," Papers DYNREG25, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:dynreg25
    Note: DYNREG Research Project - Dynamic Regions in a Knowledge-Driven Global Economy: Lessons and Policy Implications for the European Union
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    References listed on IDEAS

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    Cited by:

    1. Frank Barry & Adele Bergin, 2010. "Ireland’s Inward FDI over the Recession and Beyond," The Institute for International Integration Studies Discussion Paper Series iiisdp321, IIIS.

    More about this item

    Keywords

    DYNREG; Foreign direct investment; China; European Union;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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