Proceedings of the 2nd International Academic Conference on Humanities and Social Science
The Impact of the European Economic Integration on the Uk’s Foreign Direct Investment
The main aim of this paper is to assess the impact of European economic integration on the UK’s foreign direct investment. The objective is achieved by using two types of methods: difference-in-difference estimator for a comparison with other countries outside the EU and mixed-effects regression to evaluate the role of economic welfare of origin countries and their EU membership. Even if on long-run the UK attracted more FDI compared to OECD countries outside the EU in the period 1970-2017, the EU membership did not bring a high increase in the UK’s FDI. On the other hand, the GDP per capita and exports in the origin countries seem to be more important in deciding to invest in the UK rather than the EU membership of these countries.
Keywords: European economic integration, FDI, difference-in-difference estimator, mixed-effects model.