87-98

• Aristotelous, Kyriacos
• Φουντάς, Στυλιανός

This paper investigates the effect of EMU on inward FDI flows to the Eurozone using panel data from 22 OECD countries for the period 1973-2006. The empirical findings suggest that the EMU led to a statistically significant overall increase in inward FDI flows to countries that adopted the euro as their national currency. They also show that the EMU effect on inward FDI flows differs substantially across member countries.

• Economics and Business
• Computer and information sciences

• Economic policy
• Statistics

currency unions, Euro, EMU, FDI

Περιέχει σημειώσεις, πίνακες και βιβλιογραφία, We thank participants at the 27th International Symposium on Money, Banking and Finance (Bordeaux, 2010), the Eastern Economic Association meeting (New York, 2011), the European Economics and Finance Society annual conference (London, 2011) and seminar participants at the National University of Ireland, Galway for helpful comments. Financial assistance from a grant provided under the basic research scheme (Cycle D) and administered by the University of Macedonia Research Committee is gratefully acknowledged., JEL Classification: F15, F21, F36

1. Aristotelous, K., 2005, Do currency unions affect foreign direct investment? Evidence from US FDIflows­into­the­European­Union,­Economic Issues, 10, 1-10.Arellano,­M.­and­Bond­S.,­1991,­Some­Tests­of­Specification­for­Panel­Data:­Monte­Carlo­Evidence­and an Application to Employment Equations. Review of Economic Studies, 58, 277-297.Arellano, M. and Bover O., 1995, Another Look at the Instrumental Variable Estimation of ErrorcomponentsModels. Journal of Econometrics, 68, 29-51.Baldwin, R., V. DiNino, L. Fontagne, R. De Santis, D. Taglioni, 2008, Study on the impact of theEuro on trade and foreign direct investment, European Economy, Economic Papers 321.Brouwer, J., R. Paap, and J-M. Viaene, 2008, The trade and FDI effects of EMU enlargement, Journalof International Money and Finance, 27, 188-208.De Sousa, J. and J. Lochard, 2006, Does the single currency affect FDI ?, Unpublished manuscript.Glick, R., and A. Rose, 2002, Does a currency union affect trade? The time-series evidence, EuropeanEconomic Review, 46, 1125-1151.Micco, A., Stein, E. and Ordoñez, G., 2003, The Currency Union Effect on Trade: Early Evidencefrom the European Union, Economic Policy, 18(37), 315-356.Neary, P., 2007, Cross-border mergers as instruments of comparative advantage, Review of EconomicStudies, 74, 1229-1257.Petroulas, P., 2007, The effect of the euro on foreign direct investment, European Economic Review,51, 1468-1491.Rose, A., 2000, One Money, One market: the Effect of Common Currencies on Trade, EconomicPolicy, 15(30), 7-46.Schiavo.­S.,­2007,­Common­currencies­and­FDI­flows,­Oxford Economic Papers, 59(3), 536-560.Wei, S-J. and C. Choi, 2002, Currency blocks and cross-border investment, Unpublished manuscript.Wooldridge, Jeffrey M., 2002, Econometric Analysis of Cross Section and Panel Data, Cambridge,MA: The MIT Press.UNCTAD, 1998, World Investment Report 1998—Trends and Determinants, UN: New York.UNCTAD, 2007, World Investment Report, United Nations: New York and Geneva.