Article

 

Countries’ International Competitiveness and FDI: an empirical analysis of selected EU Member-Countries and Regions (p.35-52)

by

George Anastassopoulos, Department of Business Administration, University of Patras, Greece

Keywords : International Competitiveness, FDI, MNEs, European Union

JEL classification : F23, F21

Abstract

This paper empirically examines the relationship of a country’s international competitiveness as defined and measured by the International Management Development (IMD) and its accumulation of inward Foreign Direct Investment (FDI) stock. This relationship is analysed for the European Union (EU)-15 Member-Countries and for the period 2003-2006 which coincides with processes of enlargement, structural changes, increased global competition for EU-located firms, and pressure for relocation of their economic activities. EU South Member-Countries (SMCs) are examined separately from North Member-Countries (NMCs) taking into account structural and regional differences . Evidence suggests a heterogeneous response of FDI towards the two EU regions - considered as country groups - in the processes of globalization, as well as the discriminating effects of different aspects of competitiveness on FDI e.g. economic performance, government efficiency, business efficiency and infrastructure. An interesting outcome is that the role of government in influencing international competitiveness and consequently the levels of FDI is more important in SMCs than in NMCs.