ScholarLens Back to search
2006•Revue économiqueRequires access

Currency Union and FDI

José de Sousa, Julie Lochard

Open publisher page 0 citations

Abstract

We empirically study the impact of monetary integration on foreign direct investment (fdi) using a theoretically grounded model. A single currency may induce more fdi since it reduces macroeconomic uncertainty and lowers transaction costs. We find that the Economic and Monetary Union (emu) plays an important role for stimulating fdi stocks and flows within the euro-zone. This result is robust to a variety of sensitivity tests related to the sample. Moreover, the size of the euro’s impact on fdi seems larger in peripheral countries compared to the central nations of the eurozone. Classification JEL: F15, F21, F33

About this research paper

What this paper is about

We empirically study the impact of monetary integration on foreign direct investment (fdi) using a theoretically grounded model. A single currency may induce more fdi since it reduces macroeconomic uncertainty and lowers transaction costs. We find that the Economic and Monetary Union (emu) plays an important role for stimulating fdi stocks and flows within the euro-zone. This result is robust to a variety of sensitivity tests related to the sample. Moreover, the size of the euro’s impact on fdi seems larger in peripheral countries compared to the central nations of the eurozone. Classification JEL: F15, F21, F33

Why it matters

A significance statement is not available in the OpenAlex record.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

We empirically study the impact of monetary integration on foreign direct investment (fdi) using a theoretically grounded model. A single currency may induce more fdi since it reduces macroeconomic uncertainty and lowers transaction costs. We find that the Economic and Monetary Union (emu) plays an important role for stimulating fdi stocks and flows within the euro-zone. This result is robust to a variety of sensitivity tests related to the sample. Moreover, the size of the euro’s impact on fdi seems larger in peripheral countries compared to the central nations of the eurozone. Classification JEL: F15, F21, F33

Key concepts: Foreign direct investment, International economics, Currency, Economic and monetary union, Economics, Currency union, Monetary economics, Sample (material)

Related papers

Related paper 1Related paper 2Related paper 3
Back to paper searchBrowse research topicsOriginal source
Currency Union and FDI — Research Paper | ScholarLens