Scholarlink

<p>This paper examines how increased monetary integration in Europe, through fixed exchange rates or a single currency, affects US outward Foreign Direct Investment (US OFDI). We analyze 56 host countries from 1985 to 2019, focusing on the European Union (EU) and specific EU country groupings. Using dummy variables, we distinguish <i>real</i> and <i>monetary</i> effects and key stages of European monetary integration. A benchmark gravity model, estimated with two Poisson Pseudo-Maximum Likelihood (PPML) estimators, shows that both horizontal FDI (firms replicating production to serve local markets) and vertical FDI (fragmenting production to exploit cost differences) drive US OFDI. EU membership alone significantly attracts US investment, highlighting the Single Market’s role in a range between 119% and 138%. Furthermore, the exchange rate stability implicit in the Exchange Rate Mechanism (ERM) and the euro also produced an additional positive impact on US FDI of 53% and 32%, respectively, though with substantial disparities between core and peripheral countries. These findings remain robust across various specifications and estimators.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

European Monetary Integration and Transatlantic Investment: Assessing US Outward FDI to the EU

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2025年6月16日

查看全文
  • Mariam Camarero,
  • Sergi Moliner,
  • Cecilio Tamarit

摘要

This paper examines how increased monetary integration in Europe, through fixed exchange rates or a single currency, affects US outward Foreign Direct Investment (US OFDI). We analyze 56 host countries from 1985 to 2019, focusing on the European Union (EU) and specific EU country groupings. Using dummy variables, we distinguish real and monetary effects and key stages of European monetary integration. A benchmark gravity model, estimated with two Poisson Pseudo-Maximum Likelihood (PPML) estimators, shows that both horizontal FDI (firms replicating production to serve local markets) and vertical FDI (fragmenting production to exploit cost differences) drive US OFDI. EU membership alone significantly attracts US investment, highlighting the Single Market’s role in a range between 119% and 138%. Furthermore, the exchange rate stability implicit in the Exchange Rate Mechanism (ERM) and the euro also produced an additional positive impact on US FDI of 53% and 32%, respectively, though with substantial disparities between core and peripheral countries. These findings remain robust across various specifications and estimators.