FDI Flows in EU Countries: The Role of Common Currency and Uncertainty - Essay Example

Extract of sample
FDI Flows in EU Countries: The Role of Common Currency and Uncertainty

The liberalisation of the market, financial liberalisation, government policies and regional agreements and integration have contributed to the continued increase of FDI in Europe in particular and around the world in general (Coeurdacier, De Santis and Aviat 2009).
Since the introduction, of Euro as the common currency among country members of the European Union, hopes for closer economic integration and political cooperation are heightened within the European Union (Henning 2007). Having a common currency within the Euro zone, is a fundamental issue among country members (De Souza and Lochard 2006) not only because the Euro plays a pivotal role in international transactions, especially with countries who have pegged their denomination with the Euro, but more so because a common currency has a positive effect on trade (Micco et al. 2003). However, when it comes to the impact of the Euro vis-a-vis FDI within the EU, minimal studies have been conducted (De Souza and Lochard 2006).
FDI contributes in the creation of economic stimulus that can propel economic growth and development. The European Commission (2009), in a study confirms that FDI has a direct and positive effect to investments, production and export as evidenced by continued increased in these sectors of the country. At the same time, technological spillover, competitiveness and management techniques are valuable indirect effects of FDI within the EU (European Commission 2009). In this regard, understanding the impact of the Euro in the FDI flows within the Euro zone is integral in apprehending the advantages and benefits in adopting a common Euro. ...
Download paper


Globalisation and rapid technological developments are the primary vehicles enabling the flow of investment to move from one country to another with relative ease. …
Author : jazmynewindler
Download 1

Related Essays

Implications of GCC currency union
The creation of a currency union is centred upon the formulation of a new currency that will be adopted as legal tender for all the member countries that form the union. The process is complex and delicate, since it necessitates the absorption of the national currencies into one, and with this the unification of monetary policy for the union (Krueger, Kamar & Carlotti, 2009). National economic and monetary policy are necessarily implicated, such that the individual states give up to an extent their sovereign right to policy determination insofar as they are constrained by the union.
56 pages (14056 words) Dissertation
The Impact of 2008 Financial Crisis on UK's Cross Border Mergers
The findings of this research will provide insight of a merger as a business process by means of which, two or additional number of companies can pool their business assets and form a single organization. In general, the stocks of the parent companies’ are given up. Instead, the stock of a new company is issued. For instance, when the Daimler-Benz and Chrysler merged, both the companies stopped to exist and in their place Daimler-Chrysler was formed. Cross border mergers are those mergers wherein the involved companies are set up in different countries. Over the years, this type of merger...
36 pages (9036 words) Dissertation
What is the state of corporate governance in the UK, USA, EU, Australia, Japan and the GCC countries?
It a discipline that focuses mainly on existing relationships between a company’s top management, its stockholders, boards, regulators, other stakeholders and auditors, and is a “system by which companies are directed and controlled” (Corporate Governance, nd., p.11). The system takes into account various market and regulatory structures, while also considering objectives for governing business firms. As OECD framed it, “Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also...
35 pages (8785 words) Literature review
Discuss the Role of Exchange Traded Currency Options in Risk Management
Over the counter (OTC) transactions are primarily utilized in currency options trade. Leverage is integral to exchange traded currency options. In this regard, returns associated with the resultant transactions are massive. On the same note, such transactions come with a downside of risks. Combining traded currency options with concurrent forex pair enhances locking in of profits. As a result, risks are minimized. Therefore, the role of exchange traded currency options in the management of risks can be evaluated on the degree with which they manage to reduce risks in the underlying...
9 pages (2259 words) Essay
Currency Options and Their Role in International Trade
In order to deal with the problem of changing market prices, the trader needs to continually evaluate and analyze the functions of the market and the goals of the business enterprise (Stanley 1998). In addition, the business must be in a position to put in place new market rules and to be monitoring the trade trends and its development. In most of the world states, trade has emerged as one of the key sectors of the economy and most of her citizens depend on the trade for their source of living. The growth of the energy markets and the strategies of the energy providers have been the driving...
9 pages (2259 words) Essay
Currency crisis
However, his academic excellence and outstanding performance in various portfolios he has held proves his critics wrong (Blackden 2012). The responsibility of salvaging the United Kingdom’s currency crisis will be his primary responsibility as the governor of the Central Bank of England. Blackden’s article in The Telegraph highlights some of the attributes that Mark Carney possess that makes him a good choice for the position. The article clearly outlines possible ways that economists think Mark Carney would use to restore Britain’s dwindling economy. In this way, it has proved and...
6 pages (1506 words) Essay
The Ruritanian Project
Organizations can choose to conduct environmental scanning of varying level such as, multinational, regional and national. In case of multinational, a wide range of aspects are assessed to identify, forecast and monitor the trends. These trends include the political and economic trends of the countries (Deresky, 2006; Lall and Sahai, 2008). In this case, the company, which is headquartered at United Kingdom, is planning to open its new manufacturing unit in Ruritania. Ruritania is a developing Eastern European country with a stable political and economic condition. This report focuses on...
8 pages (2008 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!