Regional Integration and Foreign Direct Investment
38 Pages Posted: 12 Jul 2000 Last revised: 14 Dec 2022
Date Written: April 1997
Abstract
This paper deals with the investment effects of regional integration agreements and discusses how such arrangements may affect inward and outward foreign direct investment flows in the integrating region. After setting up a conceptual framework for the analysis, we provide three studies focusing on different kinds of regional integration: North-North integration (Canada joining CUSFTA), North-South integration (Mexico's accession to NAFTA), and South-South integration (MERCOSUR). The main conclusion of the study is that the responses to an integration agreement largely depend on the environmental change brought about by the agreement and the locational advantages of the participating countries and industries. Moreover, the findings suggest that the most positive impact on FDI has occurred when regional integration agreements have coincided with domestic liberalization and macroeconomic stabilization in the member countries.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Ewe-ghee Lim
-
Regional Integration and the Location of FDI
By Eduardo Levy Levy-yeyati, Ernesto Stein, ...
-
The Cyclical Nature of North-South FDI Flows
By Eduardo Levy Levy-yeyati, Ugo Panizza, ...
-
Regional Integration and Foreign Direct Investment: A Conceptual Framework and Three Cases
By Magnus Blomstrom and Ari Kokko
-
The Ftaa and the Location of FDI
By Eduardo Levy Levy-yeyati, Ernesto Stein, ...
-
Beyond Trade: The Impact of Preferential Trade Agreements on Foreign Direct Investment Inflows
-
Foreign Direct Investment and Regional Trade Agreements: The Market Size Effect Revisited