Skip Navigation


Cambridge Journal of Economics Advance Access originally published online on January 10, 2007
Cambridge Journal of Economics 2008 32(1):1-28; doi:10.1093/cje/bel044
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
32/1/1    most recent
bel044v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Taylor, C.
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2007. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

Foreign direct investment and the euro: the first five years

Christopher Taylor*

* National Institute of Economic and Social Research

Address for correspondence: Christopher Taylor, Visiting Fellow, National Institute of Economic and Social Research, London, UK; email: cttaylor{at}btinternet.com

This paper assesses the main influences on foreign direct investment (FDI) flows between the major economies in the first five years of economic and monetary union (EMU). Using previously unpublished data specially provided by Eurostat, it concludes that the huge wave of FDI that reached the Eurozone after EMU was largely a manifestation of the end-of-century takeover boom, a global phenomenon of which the euro was only a subsidiary cause. But much of the boom in euro economies' FDI disappears if flows to and from the Belgium–Luxembourg Economic Union (BLEU) (dominated by transhipment via Luxembourg) are removed. On that basis, intra-zone FDI turns out to have been weak after EMU, both in relation to previous trends and as a share of major economies' global FDI flows. However, the euro appears to have given a modest stimulus to inflows from other major investing economies, while the UK share of the latters' outflows has fallen moderately in the post-EMU period. The policy implications are discussed.

Key Words: Euro • Eurozone • EMU • FDI • BLEU • Mergers and acquisitions

JEL classifications: F21, F23, G34

Manuscript received April 11, 2005; final version received November 30, 2005.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.