Foreign Direct Investment in the European Community: Some Policy Issues

Oxford Review of Economic Policy 9 (2)

Posted: 21 Jul 2016

See all articles by Damien Neven

Damien Neven

Graduate Institute of International and Development Studies (IHEID)

Georges Siotis

Universidad Carlos III de Madrid - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: February 20, 1993

Abstract

Four main conclusions stand out from the analysis. First, we conclude that the motivations behind foreign direct investment (FDI) raise issues of principle for competition policy but are too general to warrant attention. Second, we find that the pattern of investment across industries in the EC is consistent with the hypothesis that foreign firms might locate in the Community to source domestic technology. Third, we discuss the potential conflicts that may arise between national authorities in the implementation of competition policy. Fourth, we find that the subsidies awarded by European governments to attract foreign investments are large; some simple calculations suggest, however, mat these subsidies might not be excessive when labour market conditions in the domestic economy are particularly poor.

Keywords: Foreign direct investment, Technology sourcing

Suggested Citation

Neven, Damien and Siotis, Georges, Foreign Direct Investment in the European Community: Some Policy Issues (February 20, 1993). Oxford Review of Economic Policy 9 (2), Available at SSRN: https://ssrn.com/abstract=2812193

Damien Neven

Graduate Institute of International and Development Studies (IHEID)

Rue de Lausanne 132
P.O. Box 136
Geneva, 1211
Switzerland

Georges Siotis (Contact Author)

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+34 91 624 9312 (Phone)
+34 91 624 9875 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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