EMU and FDI flows

The aim of this paper is to construct and test a model explaining the inward FDI position of various EMU countries on the basis of their location advantages. The model consists of variables approximating location advantages as these are suggested by economic theory and empirical research. The paper also investigates the impact of EMU on FDI inflows. For this reason the countries under examination are separated in two clusters: EMU Core and EMU periphery countries. The focus is on the potential different impact of the euro adoption, among these clusters, in terms of attracted FDI inflows.