Foreign direct investment and the single market

Arbeitspapier

This paper extends the theory of multinational corporations, identifying three distinct influences of internal trade liberalisation by a group of countries on the level and pattern of inward foreign direct investment (FDI). First, the tariff-jumping motive encourages plant consolidation. Second, the export platform motive favours FDI with only a single union plant relative to exporting, and may induce a firm which has never exported to invest. Finally, reduced internal tariffs increase competition from domestic firms, which dilutes the other motives and may induce a Fortress Europe outcome of multinationals leaving union markets even though external tariffs are unchanged.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Centre for Economic Research Working Paper Series ; No. WP01/24

Classification and Topics

• Classification: Wirtschaft
• Subject: Foreign direct investment ; market integration ; multinational corporations ; Single Market ; Direktinvestition ; Wirtschaftsunion ; Außenhandelsliberalisierung ; Theorie ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Neary, J. Peter
• Event: Veröffentlichung
• (who): University College Dublin, Department of Economics
• (where): Dublin
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/72365
• Last update: 10.03.2025, 11:41 AM CET