Re-Entering Europe: Does European Union Candidacy Boost Foreign Direct Investment?

27 Pages Posted: 8 Jan 2005

See all articles by Kimberly A. Clausing

Kimberly A. Clausing

Reed College - Department of Economics

Cosmina L. Dorobantu

Reed College - Department of Economics

Abstract

This study examines the ability of the Central and Eastern European countries to attract foreign direct investment during the first decade of transition. After considering a model of profit maximizing firms, we undertake an empirical investigation of the factors that determine multinational firms' location decisions within Europe. We find empirical support for the traditional market size and cost factors. In addition, we examine the effect of key European Union announcements regarding the accession process. Results indicate that the announcements had statistically significant and quantitatively important effects on foreign direct investment in the Central and Eastern European candidate countries.

Suggested Citation

Clausing, Kimberly A. and Dorobantu, Cosmina L., Re-Entering Europe: Does European Union Candidacy Boost Foreign Direct Investment?. Economics of Transition, Vol. 13, No. 1, pp. 77-103, January 2005. Available at SSRN: https://ssrn.com/abstract=645146

Kimberly A. Clausing (Contact Author)

Reed College - Department of Economics ( email )

3203 SE Woodstock Boulevard
Portland, OR 97202-8199
United States
503-517-7388 (Phone)
503-777-7776 (Fax)

Cosmina L. Dorobantu

Reed College - Department of Economics ( email )

3203 SE Woodstock Boulevard
Portland, OR 97202-8199
United States

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