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What Is The Impact Of Currency Unions On FDI Flows? Evidence From Eurozone Countries

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Executive Summary

This paper investigates the effect of EMU on inward FDI flows to euro zone using panel data from 22 OECD countries for the period 1973-2006. The empirical findings suggest that the EMU led to a statistically significant overall increase in inward FDI flows to countries that adopted the euro as their national currency. They also show that the EMU effect on inward FDI flows differs substantially across member countries with the core countries having benefited mostly from FDI flows.

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