Portal de Periódicos da CAPES

Foreign Direct Investment and the Single Market

2002; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.297222

1556-5068

J. Peter Neary,

Merger and Competition Analysis

The reduction in barriers to trade within the European Union has had important but disputed effects on inward direct investment. On the one hand, fears have been expressed that the Union could become a "Fortress Europe", with foreign firms effectively excluded from the internal market. On the other hand, there is considerable empirical evidence for the importance of the Single Market in encouraging more foreign direct investment into the European Union. (See Neven and Siotis (1996) and Pain (1997), for example.) In the case of smaller and more peripheral countries, such as Ireland, Spain and Portugal, this effect has been particularly significant. (See Barry (1999), for example.) Of course, empirical work tends to concentrate on those firms which have in fact located in the EU, and hance may miss the "Sherlock Holmes" cases: potential multinationals which, like the dog that did not bark in the night, have chosen not to locate in or even to supply EU markets.