Technology sourcing and FDI in the EC: An empirical evaluation

This paper presents an econometric analysis of foreign direct investment flows in the four large countries of the EC, at the sectoral level and for the period 1984-89. We find that technological sourcing might be an important motive behind investment flows originating in the US and Japan but not behind intra-EC flows. Besides, we observe that “tariff jumping” may be an additional motivation behind Japanese and US investments and that all investments flows responded positively to the prospective of the internal market.