RELATIONSHIP BETWEEN EUROZONE MEMBERSHIP AND FOREIGN DIRECT INVESTMENTS

Dehari, Gazmend (2021) RELATIONSHIP BETWEEN EUROZONE MEMBERSHIP AND FOREIGN DIRECT INVESTMENTS. International Scientific Journal in Economics, Finance, Business, Marketing, Management and Tourism, 8 (15-16). pp. 108-115. ISSN 2545-4544

Text Economic Vision, Vol.8, No.15_16 FINAL-108-115.pdf Download (575kB)

Abstract

With the creation of the euro area and the use of the euro as a common currency, member countries enabled companies that originated in one of the member countries, to sell their products more easily and thus stimulate foreign direct investments. The monetary and economic union of the euro area has made easier for enterprises to penetrate the markets of member countries by reducing their fixed costs. Firms instead of keeping one account for each of their economic activities in each state, for example with 11 different currencies, trying to hedge against unforeseen exchange rate fluctuations and its effect on sales, now overall, they can deal with only one account. Foreign direct investments, especially vertical investment, have enabled enterprises to produce their products in countries that have had the most favorable costs for them. Because this has stimulated trade and trade had also been stimulated by the effect of the adoption of the euro as a common currency, it is expected that the common currency in turn will stimulate foreign direct investments, even more. Evidence for this effect will be provided below, citing various studies that will verify the positive impact of the euro area on stimulating foreign direct investments in member countries. In this paper, an estimation of the determinants of foreign direct investment will be given through various methods. The methods that will be used, are the panel data, fixed effects, and random effects method. The data that will be used to make the analysis will be obtained from the Republic of North Macedonia and from countries that are its main partners and that are members of the European Union and the Euro area

Item Type:	Article
Subjects:	Q Science > Q Science (General)
Divisions:	Faculty of Law, Arts and Social Sciences > School of Management
Depositing User:	Unnamed user with email zshi@unite.edu.mk
Date Deposited:	05 Oct 2021 16:58
Last Modified:	05 Oct 2021 16:58
URI:	http://eprints.unite.edu.mk/id/eprint/862

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