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

Kiel Working Paper No. 1061

46 Pages Posted: 28 Jul 2001

See all articles by Claudia M. Buch

Claudia M. Buch

Deutsche Bundesbank

Robert M. Kokta

University of Kiel - Institute for World Economics (IfW)

Daniel Piazolo

THM Technische Hochschule Mittelhessen

Date Written: July 2001

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.

Keywords: European Integration, Transition Economies

JEL Classification: F15, F21

Suggested Citation

Buch, Claudia M. and Kokta, Robert M. and Piazolo, Daniel, Does the East Get What Would Otherwise Flow to the South? FDI Diversion in Europe (July 2001). Kiel Working Paper No. 1061, Available at SSRN: https://ssrn.com/abstract=278069 or http://dx.doi.org/10.2139/ssrn.278069

Claudia M. Buch

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Robert M. Kokta

University of Kiel - Institute for World Economics (IfW) ( email )

Dusternbrooker Weg 120
D-24100 Kiel
Germany

Daniel Piazolo (Contact Author)

THM Technische Hochschule Mittelhessen ( email )

University of Applied Sciences
Wilhelm-Leuschner-Straße 13
Friedberg, 61169
Germany

HOME PAGE: http://www.thm.de/wi/daniel-piazolo