Alexe, Ileana and Tatomir, Cristina F. (2011): Does economic convergence with the European Union mean more FDI flows to an economy? Analysis on 5 Central and Eastern Europe countries.
Download (589kB) | Preview
In this paper we analyze the relationship between economic convergence with the European Union (EU) and foreign direct investment flows to 5 EU countries (Bulgaria, Czech Republic, Poland, Romania and Hungary) in the period 2001 – 2010, in order to determine if the process of economic convergence with the EU level influences FDI inflows in these economies. We use an economic convergence index, made up of real and structural convergence indexes, to assess the level of economic convergence. The study does not provide us with a clear response to our question. We report a tight relationship between convergence index and FDI inflows in Bulgaria, but quite divergent evolutions of the two variables in the case of Hungary.
|Item Type:||MPRA Paper|
|Original Title:||Does economic convergence with the European Union mean more FDI flows to an economy? Analysis on 5 Central and Eastern Europe countries|
|Keywords:||convergence index; foreign direct investments; European Union|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Cristina F. Tatomir|
|Date Deposited:||23. Jan 2012 17:56|
|Last Modified:||14. Jan 2016 02:11|
1. Barrios, S, F. Barry and E. Strobl (2002), FDI and Structural Convergence in the EU Periphery, Centre for European Policy Research, Workshop and Conferences no. 2319.
2. Choi, C. (2004), Foreign direct investment and income convergence, Applied Economics, Vol. 36, Issue 10, 1045-1049.
3. Clark, T. E., van Wincoop, E. (2001): Borders and business cycles, Journal of International Economics, 55(1), 59-85.
4. Deutsche Bank Research (2002), EU enlargement monitor – Central and Eastern Europe, No. 8, 1-33.
5. Diaz Vazquez, R. (2004), Foreign direct investment and regional convergence: an international approach, ERSA conference papers, European Regional Science Association.
6. Eickmeier, S., Breitung, J. (2006), Business cycle transmission from the euro area to CEECs, Computing in Economics and Finance, no. 229, Society for Computational Economics.
7. European Commission (1990), One market, One Money: an evaluation of the potential benefits and costs of forming an economic and monetary union, European Economy, no. 44.
8. Frankel, J.A., Rose, A.K. (1998), The endogenity of the optimum currency area criteria, The Economic Journal, Vol. 108, 1009-1025.
9. Galor, O. (1996), Convergence? Inferences from Theoretical Models, The Economic Journal, Vol. 106, No. 437, 1056-1069.
10. Group of Applied Economics (GEA) (2007), Handbook for assessing the regional competitiveness of Romania, GOF project - Building Regional Assessment Capacity in Line with the Lisbon Agenda, with the support of British Embassy in Romania.
11. Imbs, J. (2004), Trade, Finance, Specialization, and Synchronization, Review of Economics and Statistics, 86 (3), 723-734.
12. Jansen, W. Jos, Stokman, Ad C.J. (2004), Foreign Direct Investment and International Business Cycle Comovement, Working Paper No. 401, European Central Bank.
13. Krugman, P. (1991), Geography and trade, MIT Press, Cambridge.
14. Marinas, M.C. (2006), Determinants of Business Cycle Convergence in Euro Area. The Romanian Case, Theoretical and Applied Economics, Asociaţia Generală a Economiştilor din România - AGER, vol. 10(10(505)), 45-54.
15. Miron, D., Dima, A. şi Păun, C., (2009), A model for assessing Romania's real convergence based on distances and clusters method, Munich Personal RePEc Archive MPRA, paper no. 31410.
16. Onen, E.(2008), Foreign Direct Investment and Business Cycles, An Empirical Analysis of United States, United Kingdom, Turkey, Euro-area and China, Master Thesis, ID number: i468762, Maastricht University.
17. Trăistaru‐Siedschlag, I. (2005), Transmission Channels of Business Cycle Synchronization in an Enlarged EMU, WHU Paper.
18. Van de Coevering, C., (2003), Structural convergence and monetary integration in Europe, Bank of Netherlands, Monetary and Economic Policy Department, MEB Series nr. 2003-20.
19. Wang, M, Sunny Wong, M. C. (2007), Foreign Direct Investment Outflows and Business-Cycle Fluctuations, Review of International Economics, Vol. 15, No. 1, 146-163.
20. Eurostat database, last accessed on 1st August 2011.