Does Foreign Direct Investment Replace Home Country Investment? The Effect of European Integration on the Location of Swedish Investment

Bibliographic Data

ID7876803
AuthorsPontus Braunerhjelm (0000-0003-0218-7924, KTH Royal Institute of Technology), Lars Oxelheim (0000-0001-9587-3207, University of Agder)
Year2000
Volume38
Issue2
Pages199-221
Publication date2000-06-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJCMS Journal of Common Market Studies (JOURNAL)
Journal identifiersISSN: 0021-9886 • E-ISSN: 1468-5965
PublisherWiley (PUBLISHER • GB)
DOI10.1111/1468-5965.00217
OpenAlexW2013681893
LanguageEN
Citations received1
References cited1

The purpose of this article is to examine the effects of European integration on the location of investments by Swedish multinational corporations (MNCs). Evidence is presented about the extent to which European integration has attracted investment by Swedish MNCs, and whether foreign direct investment (FDI) is being undertaken at the expense of home country investment. In the empirical analysis, involving both OLS and iterative SUR techniques, a significant difference across industries has been confirmed. A substitutionary relationship between foreign and home country investment is found for more R&D‐intensive production, whereas the opposite pattern seems to prevail for production based on traditional comparative advantage. The results of this study emphasize the importance of using disaggregated industry‐level data when analysing the effects of foreign direct investment on home country investment

Business · Economics · Foreign direct investment · Foreign portfolio investment · International economics · International trade · Investment (military · Macroeconomics · Multinational corporation · Open-ended investment company · Production (economics · Return on investment · Finance · Global trade and economics · Regional Development and Policy · Regional Economics and Spatial Analysis

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