Abstract
The process of current and future enlargement of the EU adds another dynamic element to the challenges facing the Commission in reforming the existing framework for FDI competition. Here, the balancing act for accession countries and the EU alike is to align the (mostly non-conforming) FDI policies and instruments in the new member countries with the EU competition Aquis, while at the same time allowing the newcomers to maintain a competitive framework for FDI. An effective solution to this issue will depend both on substance as well as the overall approach applied to the process of policy integration. The following sub-chapter will address these issues from an institutional point of view, backed by empirical data.
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References
Specifically, these criteria include (i) stability of institutions guaranteeing democracy, the rule of law, human rights and protection of minorities; (ii) existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union; (iii) ability to take on the obligations of membership including adherence to the aims of political, economic and monetary union (see EU, 2004a).
See UNCTAD (2003a), pp. 22–23.
See UNCTAD (2003), p. 64. By the end of 2002, CEE countries had concluded more than 700 BITs and over 600 DTTs, which account for more than 33 and 27 percent of the world’s BITs and DTTs, respectively.
See UNCTAD (2003), p. 64; EU (2003), p. 122.
See EU (2004), p. 46.
See EU (2003b), p. 11.
See, for example, SINN (1992); SIEBERT/ KOOP (1993, 1994); STREIT (1996); STREIT/KIWITT (1999); KLODT (1999); SIEBERT (2000); CASPERS (2004) for a detailed discussion.
See DÜMLER (2000), p. 180.
See WOHLGEMUTH (1995), p. 1.
See SIEBERT/ KOOP (1994) for a detailed overview of both lines of arguments.
See KLODT (1999), p. 6.
For an opposing view concerning the effectiveness of policy regulation vis-à-vis spillover effects see, for example, SIEBERT (1994). However, the variable “international spillovers” can easily be substituted with “strategic behavior” of individual states, which has been more readily accepted as having a potentially negative impact on competition, and thus can be used as case for international coordination in the area of competition policy (see SIEBERT/ KOOP, 1994, p. 613).
See SIEBERT (1997).
SIEBERT/ KOOP (1994), p. 614.
STEIN/ DAUDE (2001) used a variety of institutional factors appearing in (i) KAUFMANN/ KRAY/ ZOIDO-LOBATON (1999); (ii) POLITICAL RISK SERVICES (1995); and (iii) WORLD BANK (1999).
STEIN/ DAUDE (2001), p. 19.
“Embeddedness” here refers to the NIE distinction between Level 2 and 3 institutions, and the fact that both are conditionally interlinked with each other. Therefore, any adjustment in either one of them should be made in a “slow, molecular, deliberative way” (WILLIAMSON, 2000, p. 610).
See UNCTAD (2003), p. 63.
See RAINES/ BROWN (1999), p. 110.
For a more comprehensive model to determine the role of a wider variety of institutional factors and countries in a full fledged gravity model see, for example, STEIN/ DAUDE (2001).
A number of recent studies have used ICRG rankings as an indicator of property rights as well as measure of broader institutional quality in general, see, for example, TOBIN/ ROSE-ACKERMAN (2004); HALLWARD-DRIEMEIER (2003); RODRIK/ SUBRAMANIAN/ TREBBI (2002); STEIN/ DAUDE (2001).
FDI stocks are used here as an indicator because they better capture the “absolute” exposure that a firm may want to have in a given country, and, thus, also the changes in the “relative beauty” of a location over time (see STEIN/ DAUDE, 2001, p. 10).
See COHEN/ COHEN/ WEST/ AIKEN (2003), pp. 221–222. In addition, transformations also serve to eliminate heteroscedasticity and to normalize residuals.
STEIN/ DAUDE (2001), p. 17.
See MALLYA/ KUKULKA/ JENSEN (2004), p. 123.
SIEBERT/ KOOP (1994), p. 614.
See DOYLE/ WIJNBERGEN (1994), pp. 211–212.
They can also be an instrument to overcome certain agglomeration patterns associated with a “follow-the-leader” (KNICKERBOCKER, 1973) strategy (see CHARLTON, 2003, p. 10).
See EU (2000) pp. 14–15.
See EU (2000), p. 14.
See BIAC (2002), p. l.
See Wishlade, in RAINES/ BROWN, (1999), p. 110
See BIAC (2002), p. 1.
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© 2006 Deutscher Universitäts-Verlag | GWV Fachverlage GmbH, Wiesbaden
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(2006). Regional Integration and FDI Competition. In: Locational Tournaments in the Context of the EU Competitive Environment. DUV. https://doi.org/10.1007/978-3-8350-9109-2_12
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DOI: https://doi.org/10.1007/978-3-8350-9109-2_12
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