Common currencies and FDI flows

Abstract

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Foreign Direct Investment and Exchange Rate Regimes

“…15 Obviously, the results for developed countries are influenced by the introduction of the euro in 1999 which seems to be associated with an increase in FDI flows. This outcome is in line with the results reported by Schiavo (2007) t-values, reported in parentheses, are corrected for heteroskedasticity; due to space constraints, the coefficients for the year dummies are not shown; *** significant at 1% level; ** significant at 5% level; * significant at 10% level. Table 2 for notes; *** significant at 1% level; ** significant at 5% level; * significant at 10% level.…”

“…One study on the effects of the EMU on FDI is by Schiavo (2007). Using data for a sample of 25 OECD countries covering the period from 1980 to 2001 in conjunction with the gravity model, he shows that fixing the bilateral exchange rates by setting up the currency union has encouraged FDI.…”

What Drives Foreign Direct Investments into West Africa? An Empirical Investigation

“…The enlarged market as a result of currency union also facilitates the exploitation of economies of scale by MNCs (Pantelidis et al, 2012). Empirical evidence from the European Economic Union affirms theoretical position (De Sousa and Lochard, 2006;Petroulas, 2007;Schiavo, 2007;Brouwer et al, 2008;Aristotelous and Fountas, 2012;and Kilic et al, 2014). However, Dinga and Dingov a (2011) and Kyrikilis et al (2013) find that the euro had no significant impact on FDI while Pantelidis et al (2012) find differentiated impact on different European countries.…”

Cross-border mergers and acquisitions and European integration

“…4 Petroulas (2007) estimated the impact of the introduction of the euro on inward FDI flows and finds that the EMU increased FDI flows by approximately 15% within the euro area. See also De Sousa andLochard (2006a, 2006b), Schiavo (2007) and Brouwer et al (2008) for related work on the impact of EMU on FDI flows. However, these studies do not control for developments in the stock market and for the general tendency of investing in the euro area from the rest of the world.…”