The effect of the European structural and investment funds on net FDI inflows

Sammanfattning: This paper examines what effect the European structural and investment funds have on net FDI inflows of European member states in the period of 2005 to 2016. The aim of the paper is to fill the gap in research relating to if the EU funds are successful in attracting private investments, in the form of FDI inflows. The paper uses a fixed effects model with country level panel data to estimate the aggregate effect of all the funds as well as each fund separately. The country level data puts a limitation on the paper since the EU funds objective is to help poor regions catch up to the richer regions. To reduce this problem the paper analyses both the entire sample as well as a subgroup of the poorest EU member states. The paper finds no effect of the EU funds for the entire sample. But when looking at the subgroup of the poor countries there is an effect on FDI inflows from the European agricultural and rural development fund as well as the European regional development fund.