EU Membership and FDI: Is There an Endogenous Credibility Effect?

The European sovereign debt crisis has increased the uncertainty regarding the benefits and costs of membership in the Economic and Monetary Union. In this article, we decided not to propose a general model but to focus on one of the important components of the European financial integration. In par...

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Bibliographic Details
Published in:Journal of East-West business Vol. 24; no. 3; pp. 144 - 169
Main Authors: Stojkov, Aleksandar, Warin, Thierry
Format: Journal Article
Language:English
Published: Binghamton Routledge 03.07.2018
Taylor & Francis LLC
Subjects:
Accession
Capital mobility
Cost benefit analysis
Credibility
Econometrics
Endogenous
Estimation
EU membership
foreign direct investment
Foreign investment
Gravity
Membership
monetary integration
Monetary unions
National debt
optimum currency area
Public debt
Sovereign debt
Uncertainty
ISSN:1066-9868, 1528-6959
Online Access:Get full text
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Summary:The European sovereign debt crisis has increased the uncertainty regarding the benefits and costs of membership in the Economic and Monetary Union. In this article, we decided not to propose a general model but to focus on one of the important components of the European financial integration. In particular, we develop a structural gravity model, influenced by some very recent theoretical and econometric advancements. This new structural gravity approach provides needed theoretical underpinnings as well as strong support for the econometric estimation of gravity models.
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ISSN:1066-9868
1528-6959
DOI:10.1080/10669868.2018.1431579