| Abstract: | European Exports and Outward Foreign Direct Investment: A Dynamic Panel Data Approach. — This paper implements a panel data
approach for studying the determinants of and relationships between bilateral economic activities in terms of both trade and
foreign direct investment between the EU member states. The familiar equation for testing the determinants of bilateral exports
is reformulated to reflect recent theoretical work. It is specified as a dynamic panel data model designed to answer questions
about their relationship according to changes in different exogenous determinants. Exports and stocks of outward FDI are found
to be substitutes with respect to changes in transport costs and complements with respect to most of the other determinants. |
