Foreign direct investment and the single market

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Title: Foreign direct investment and the single market
Authors: Neary, J. Peter
Permanent link: http://hdl.handle.net/10197/1319
Date: May-2002
Abstract: This paper extends the theory of multinational corporations, identifying three distinct influences of internal trade liberalisation by a group of countries on the level and pattern of inward foreign direct investment (FDI). First, the tariff-jumping motive encourages plant consolidation. Second, the export platform motive favours FDI with only a single union plant relative to exporting, and may induce a firm which has never exported to invest. Finally, reduced internal tariffs increase competition from domestic firms, which dilutes the other motives and may induce a "Fortress Europe" outcome of multinationals leaving union markets even though external tariffs are unchanged.
Funding Details: Economic and Social Research Council (ESRC)
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Keywords: Foreign direct investment;Market integration;Multinational corporations;Single Market
Subject LCSH: International business enterprises
Free trade
Investments, Foreign
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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