Economics of European Integration Cause and Effect Essay by luckyalina

Economics of European Integration
An examination of how economic integration policy measures affect a country's location of production in the European Union.
# 111897 | 2,852 words | 12 sources | APA | 2008 | DE
Published on Feb 04, 2009 in European Studies (European Union) , Economics (General) , Economics (Globalization)

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The paper explores the extent to which integration policies, specifically the freedom for movement of capital, affects the intention of companies to engage in foreign direct investments (FDI) as the means of acquiring physical assets at a foreign location. The paper first looks at the theoretical framework, which explains how the free movement of capital is likely to create welfare gain- and/or welfare lost-effects for the parties involved. Then the paper investigates how the economic integration processes of the last two decades have influenced the countries' locational decisions across the European Union (EU). The paper includes tables of financial data as appendices to the paper.

From the Paper:

"Although the determination to establish in Europe an economic zone, free of barriers for movement of labor and capital, was spelled out back in 1957 in the Treaty of Rome, two and a half decades later the European Commission had to confront with the fact, that only fairly limited progress had been achieved for turning this into reality. The main concern, preventing countries from opening their capital markets for foreign investors, was a fear of destabilizing flows, which would trigger inflation, depreciate the currency and lead to fiscal and monetary intervention to offset them. However, the mere elimination of the restrictions on movement of capital would not foster economic growth, were there no possibilities to use these capital endowments for purchasing of physical assets."

Sample of Sources Used:

  • Commission of the European Communities (1996) Economic evaluation of the internal market , European economy, No. 4
  • Dunning J.H. The European internal market program and inbound FDI, Journal of common market studies, 1997, Vol 35 nos.1 and 2
  • El-Agraa, A. ed. (2007) The European Union: Economics and Policies, Cambridge University Press, Cambridge
  • Eurostat, EU Foreign Direct Investment in 2003, Economy and Finance 20/2005
  • European Communities (2005), European Union foreign direct investment yearbook 2005, Luxemburg.

Cite this Cause and Effect Essay:

APA Format

Economics of European Integration (2009, February 04) Retrieved June 06, 2020, from

MLA Format

"Economics of European Integration" 04 February 2009. Web. 06 June. 2020. <>