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The Impact of the Single Market Programme on the Locational Determinants of US Manufacturing Affiliates: An Econometric Analysis*
Author(s) -
Mold Andrew
Publication year - 2003
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/1468-5965.00410
Subject(s) - foreign direct investment , econometric analysis , econometric model , market size , economics , investment (military) , manufacturing sector , international economics , manufacturing , business , economic geography , macroeconomics , econometrics , marketing , politics , political science , law
This article analyses the impact of the single market programme (SMP) on the locational determinants of US foreign direct investment (FDI) in the manufacturing sector. The econometric model covers the period 1978–95, a key period in the development of the European single market. As the process of regional integration deepens, some authors have predicted that firms will become more sensitive to factor‐based differences (e.g. labour costs) between Member States, and less sensitive to changes in market conditions in the host country. This article finds no evidence of this phenomenon — variables related to the demand side (size and growth of GDP) continue to be the most important determinants of FDI inflows.