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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. The 1957 Treaty of Rome marked the establishment of the European Economic Community. This behoves the ideal of integration and co-operation among member states, which led to development of the European Union in 1993. By 1999, the Euro was adopted as a common currency within the Euro zone and by 2002; it has replaced national currencies of the some of the member states. Upon the full adaptation of the Euro, the Euro zone became the second largest economy in the world in terms of GDP. Furthermore, through common currency, financial liberalisation and integration, trade liberalisation and workforce mobility serve as the pillars fortifying the decision in adopting the Euro. As the EU continues to play a critical role in the global economy, inward FDI within the EU has become highly competitive (Gugler 2004; Oxelheim and Ghauri 2004). In this context, the research will delve into the impact of Euro, as the common currency, to FDI flows within the Euro zone. It ascertains that Euro has a positive impact in the Euro zone and that other extenuating factors such as corruption and credit rating may alter this effect. Moreover, the connection between geophysical distance and corruption is given a considerable notice since there is a possibility that proximity in the geophysical distance may have an influence in corruption perception. 1.2. Research Question Considering the significance of the Euro zone in the global economy, of Euro as an international currency and of FDI as a form of international investment, this research will address the question “what is the impact of the Euro, as a common currency, to FDI flows within the Euro zone?” In order to further clarify this question, the following sub questions will also be addressed. (1) How does corruption affect FDI
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Belgium does not discriminate between the domestic and foreign companies and there are no restrictions on investment and ownership. CHL is financially stable and has sustainable growth. However it has limited experience in overseas market and is culturally dissimilar to Belgium.
Acknowledgements The author is especially grateful to (mentor/advisor’s name) for all the patience and guidance displayed for the duration of the this research. Abstract In the aftermath of the breakdown of Communist Europe, a majority of Central and Eastern Europe are currently characterized as transition states as they transition from socialist states to market-based economies (Centeno 1994, 125).
This paper will outline limitations of a common currency as illustrated by current European Union financial crisis. Discussion The euro is a common currency used by seventeen EU states members, which together form the euro zone. Similarly, the launching of the euro (common currency) in 1999 was a key move in the integration of European countries.
Therefore, after judging these fine details, it is advisable to conduct an evaluation of the business environment of the country in which the organization is planning to operate. The various variables that need to be scanned are social, economic, demographic, governmental, technological and cultural.
According to the paper since the 1980s, foreign investment in developing countries has been directed increasingly at export-oriented projects. Most theories of foreign investment do not address the issue of the direction of foreign direct investment flows. Investment takes place rather than why it flows to a particular group of countries.
This case is hardly astounding given the opaque concern of wellbeing of debtors in the UK.
In the United States, on the contrary, the right of a debtor to restore itself has for eras been seen as greater to the right of a creditor to look for and obtain refund in full of what it is payable.
tablishment of common agricultural policies and support payments, including levies and price and structural supports. It is important to mention that the price of agricultural products is not set by the farmers but by the Council of Ministers through the European Agricultural Guidance and Guarantee Fund (EEAGF).3 As regards agricultural trade policies, these are the responsibility of the Special Committee for Agriculture.4 As a result of these measures, or to be more specific, because of CAP, the price of agricultural produce in the European Union are not related to the world market price and levies on agricultural imports ensure that cheap goods do not enter the EU agricultural produce c
According to the report the background to enlargement is explained in the first section. The reasons for supporting this policy position are explained in the next section. The recommendations for the future course of action for the EC are given in the last section. The European Union started as a six nation economic community in 1958.
It is not that an unexpected increase or decrease in the foreign currency may not be profitable and will always cause a loss.But this entire uncertainty hampers businesses and overall economic growth.
Forward or future market concerns the delivery of exchange rate to be delivered with in 3 days or more.
PRO: The countries in the GCC area are principally involved in the export of oil, and command more than half of the world’s known oil reserves. This high dependence on one industry presents a risky situation for these countries; the creation of
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