Arbeitspapier

The trade and FDI effects of EMU enlargement

This paper considers the nature and the distribution of trade and FDI effects of a potential enlargement of the European Monetary Union (EMU) to the ten countries that obtained EU membership in 2004. One-way and two-way error component gravity models are estimated using a dataset of unbalanced panel data that combines bilateral trade flows among 29 countries and the distribution of outward FDI stocks among these countries. The results reveal a complementarity between trade and investment and a relationship between trade and exchange rate volatility that depends on the sign of bilateral trade balances. Using a simulation-based technique, we find that estimates of FDI effects of EMU range between 18.5 percent for Poland and 30 percent for Hungary.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 2123

Klassifikation
Wirtschaft
Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
International Investment; Long-term Capital Movements
Foreign Exchange
International Monetary Arrangements and Institutions
Financial Aspects of Economic Integration
Thema
EMU
exchange rate volatility
foreign investment
trade diversion
vertical integration
Europäische Wirtschafts- und Währungsunion
EU-Erweiterung
Wirtschaftspolitische Wirkungsanalyse
Außenhandelseffekt
Direktinvestition
Wechselkursrisiko
Gravitationsmodell
EU-Staaten
Ungarn
Polen

Ereignis
Geistige Schöpfung
(wer)
Brouwer, Jelle
Paap, Richard
Viaene, Jean-Marie
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Brouwer, Jelle
  • Paap, Richard
  • Viaene, Jean-Marie
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2007

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