Citation

Discussion Paper Details

Please find the details for DP1659 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Regional Integration and Foreign Direct Investment

Author(s): Magnus Blomström and Ari Kokko

Publication Date: June 1997

Keyword(s): FDI, MNCs and Regional Integration

Programme Area(s): International Trade and Regional Economics

Abstract: This paper deals with the investment effects of regional integration agreements and discusses how such arrangements may affect inward and outward foreign direct investment (FDI) flows in the integrating region. After setting up a conceptual framework for the analysis, we provide three studies focusing on different kinds of regional integration: North-North integration (Canada joining CUSFTA), North-South integration (Mexico?s accession to NAFTA), and South-South integration (MERCOSUR). The main conclusion of the study is that the responses to an integration agreement largely depend on the environmental change brought about by the agreement and the locational advantages of the participating countries and industries. Moreover, the findings suggest that the most positive impact on FDI has occurred when regional integration agreements have coincided with domestic liberalization and macroeconomic stabilization in the member countries.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1659

Bibliographic Reference

Blomström, M and Kokko, A. 1997. 'Regional Integration and Foreign Direct Investment'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1659