The effects of regional trade agreements on FDI by its origin and type: Evidence from U.S. multinational enterprises activities

How Does Economic Integration Affect Progress along the Investment Development Path? A Case Study of EU Member vs. Non-Member Countries from Eastern Europe

“…As Brenton et al (1999, p. 13) put it, referring to the EU situation: "When the investing country is not an EU member, firms investing overseas might prefer an EU country over other potential host countries because it offers free access to the whole EU and EFTA markets". The empirical study conducted by Im (2016) attests to the overall positive impact of extended market on extra-regional FDI inflows, particularly via an export-platform type of investment. However, the surge of FDI inflows in such cases would be concentrated in member countries with the strongest location advantages, e.g.…”

“…The nature of this re-orientation will depend on the type of FDI. The theoretical arguments found in the literature suggest that intra-regional horizontal FDI should diminish, while vertical and export-oriented FDI should increase as a result of integration (Im, 2016;Jang, 2011;Neary, 2009). The implications of the above reasoning for less-developed members of the EU are that these countries, having location advantages (notably lower Finally, it is important to note that in the context of post-transition economies of Eastern Europe, which are still at a lower level of economic and institutional development than their Western counterparts, the argument of a seemingly symmetrical effect of the aforementioned dimensions of integration on inward and outward FDI does not hold.…”