The Trade and FDI Effects of EMU Enlargement

By J. Brouwer, Richard Paap, J. Viaene. Social Science Research Network, 2008

166 citations recorded by the source corpus.

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 10 countries that obtained EU membership in 2004. One-way and two-way error component gravity models are estimated using a data set of unbalanced panel data that combine 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 depend 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% for Poland and 30% for Hungary.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/705b2a34a2e990b9565149cb0befe36c415103d4

Citations in the corpus

• Rose effect and the euro: is the magic gone? (2010, unknown): “We examine publication bias among the literature (Card and Krueger 1995; Stanley 2005a), using the meta-regression approach (Stanley and Jarrell 1989; Stanley et al. 2008) and graphical methods (funnel plots, Galbraith plots); the ‘‘true’’ underlying effect is estimated as well. The meta-regression ”
• Cross-Border Mergers and Acquisitions and European Integration (2009, unknown): “3 See Coeurdacier and Martin (2006), De Santis (2006), De Santis and Gerard (2006), Lane (2006).”