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Economic integration, border costs and FDI location: Evidence from the fifth European enlargement

Lookup NU author(s): Dr Jonathan Jones, Professor Colin Wren



This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).


Little is known about the effect of border costs on FDI location. This paper explores this for the fifth European Union (EU) enlargement that integrated the Central and Eastern European countries (CEECs). It regresses count data for 35,105 FDI projects locating in 25 European countries over the period 1997-2010. Four EU accession events are examined for the more- and less-liberalized CEECs. It finds that the lower border costs doubled FDI in the CEECs at EU membership, of which 60% is diverted from the ‘old’ Europe. It is three-times greater for more-liberalized countries, but for which pre-membership events are much less important.

Publication metadata

Author(s): Jones J, Serwicka I, Wren C

Publication type: Article

Publication status: Published

Journal: International Review of Economics and Finance

Year: 2018

Volume: 54

Pages: 193-205

Print publication date: 01/03/2018

Online publication date: 19/08/2017

Acceptance date: 16/08/2017

Date deposited: 24/08/2017

ISSN (print): 1059-0560

ISSN (electronic): 1873-8036

Publisher: Elsevier


DOI: 10.1016/j.iref.2017.08.007


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