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Structural Funds, EU Enlargement, and the Redistribution of FDI in Europe
Review of World Economics, 2010, 146, (3), pp.469-494,
The EU enlargements of 2004 led to a redirection of Structural and Cohesion Funds expenditures from EU-15 to new EU members as did those of 2007. This redistribution of funds makes the accession countries even more attractive as a location of FDI. Using a logistic regressions approach, this paper shows that a reallocation of structural funds as outlined in Agenda (For a stronger and wider union, COM(97) 2000 final, 2000) and successive revisions of the financial perspectives for an enlarged union leads to a redistribution of FDI by approximately 4−8 percentage points from the current EU members to the accession countries (2004 scenario) and 7−10 percentage points (2007 scenario), respectively.
JEL-Codes:C33, F14, F15
Keywords:FDI, Structural funds, European integration, Spatial econometrics
Research group:Macroeconomics and Public Finance – Industrial, Innovation and International Economics