The Euro Impact on Foreign Direct Investment in EMU Countries
The Euro Impact on Foreign Direct Investment in EMU Countries

Summary/Abstract: This paper measures the Euro impact on FDI in Economic and Monetary Union countries, an issue of present concern, taking into account the recent trends of this indicator. This relation is tested with Fixed and Random Effects in a gravity model that includes a difference-in-difference estimator, over the period of 1994-2010. It is obtained a negative effect, the Euro decreasing on average inward FDI by 3,389.523 US dollars million in EMU member countries. Moreover, the paper is approaching a Quantile Regression that provides results of the Euro effect on different percentages of the FDI sample. The outcome of this regression shows that the EMU impact is indeed different across various percentiles, even positive for the first 5% of the FDI data.

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