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European Union Accession Events and the Timing of FDI Location: Do Actions Speak Louder than Words?

When Mar 05, 2014
from 04:00 PM to 05:00 PM
Where Mill Lane Room 7
Contact Name
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This paper examines the effect of announcements under the European Union (EU) accession process on the timing of foreign direct investment (FDI) in the Central and Eastern European Countries (CEECs).  It analyses count data for the number of foreign investments in EU countries over 1997-2010 using a stochastic frontier model to allow for inefficiency in FDI data collection in the CEECs prior to accession from a weaker institutional environment.  EU membership is found to be the most important accession event for FDI location, while events that signal the fulfilment of the political and economic criteria for enlargement have weaker effects.  This is the case if FDI is measured as an EU share, while in all cases there is a fall-off in FDI after membership.  The FDI effect is greater for CEECs entering into negotiations later, perhaps because these announcements have greater credibility.  Overall, the results point to the importance of access to the Single Market.


Professor Colin Wren


Colin Wren is a Professor in Economics at the Newcastle University Business School.  His research is in regional economics, focusing on the interface between government and industry, with implications for economic development.  Recent work examines industrial location, and in particular foreign direct investment and its spatial location in response to policy.  He has carried out many studies evaluating the impacts of public interventions and has served on national bodies.  He was a project leader on the ESRC Spatial Economics Research Centre and a past editor of Regional Studies.  He has published numerous articles in mainstream Economics and field journals, authoring three books.