Controls are sourced from Eurostat, unless otherwise stated, with monetary units in euros at 2005 prices using an EU deflator. Those not described in table or text are as follows. Wage rate is hourly compensation in manufacturing (International Labor Comparisons, US Bureau of Labor Statistics); not known for Bulgaria, Latvia, Lithuania, Luxembourg, Romania and Slovenia, for which an unreported dummy is included. Highest educational attainment of 25-64 year-olds at ISCED levels 3-4 and 5-6 (World Bank). Institutional quality (International Country Risk Guide, Political Risk Services); zero risk = 100. Trade liberalization is (exports + imports) / GDP (International Financial Statistics, IMF). Real effective exchange rate is a trade-weighted measure of competitiveness against a basket of 36 major trading partners.
Volatility is absolute change in exchange rate in preceding year. Tax is adjusted top statutory corporate tax rate (DG for Taxation and Customs Union, European Commission). EU Structural Funds outturn (DG for Regional Policy).
REFERENCES
Aigner, D., Lovell, C., and Schmidt, P. (1977). Formulation and Estimation of Stochastic Frontier Production Function Models. Journal of Econometrics, 6(1), 21–37.
Allison, P. D. (2009). Fixed Effects Regression Models, Quantitative Applications in the Social Sciences. Los Angeles: Sage Publications.
Amiti, M., and Smarzynska Javorcik, B. (2008). Trade Costs and Location of Foreign Firms in China. Journal of Development Economics, 85(1), 129–149.
Anderson, J., and van Wincoop, E. (2003). Gravity and Gravitas: A Solution to the Border Puzzle. American Economic Review, 93(1), 170–192.
Baldwin, R. E., Francois, J. F., and Portes, R. (1997). EU Enlargement: Small Costs for the West, Big Gains for the East. Economic Policy, 127–176. April.
Basile, R. (2004). Acquisition Versus Greenfield Investment: The Location of Foreign Manufacturers in Italy. Regional Science and Urban Economics, 34(1), 3–25.
Bevan, A., and Estrin, S. (2004). The Determinants of Foreign Direct Investment into European Transition Economies. Journal of Comparative Economics, 32(4), 775–787.
Brainard, S. L. (1997). An Empirical Assessment of the Proximity-Concentration Trade-Off Between Multinational Sales and Trade. American Economic Review, 87(4), 520–544.
Busse, M., and Hefeker, C. (2007). Political Risk, Institutions and Foreign Direct Investment.
European Journal of Political Economy, 23(2), 397–415.
Carstensen, K., and Toubal, F. (2004). Foreign Direct Investment in Central and Eastern European Countries: A Dynamic Panel Analysis. Journal of Comparative Economics, 32(1), 3–22.
Chen, N. (2004). Intra-National Versus International Trade in the European Union: Why Do National Borders Matter? Journal of International Economics, 63, 93–118.
Christoffersen, P. S. (2007). Organization of the Fifth Enlargement. In G. Vassiliou (Ed.), The Accession Story. New York: Oxford University Press.
Clausing, K. A., and Dorobantu, C. L. (2005). Re-Entering Europe: Does European Union Candidacy Boost Foreign Direct Investment. Economics of Transition, 13(1), 77–103.
Coughlin, C., and Novy, D. (2009). Is the International Border Effect Larger than the Domestic Border Effect? Evidence from U.S. Trade. In , Vol. 29. GEP research paper. UK: University of Nottingham.
Defever, F. (2012). The Spatial Organization of Multinational Firms. Canadian Journal of Economics, 45(2), 672–697.
Edwards, H. (2008). Implicit Trade Costs and European Single Market Enlargement. Applied Economics, 40(20), 2601–2613.
Egan, M. (2015). Single Markets: Economic Integration in Europe and the United States.
Oxford: Oxford University Press.
Ekholm, K., Forslid, R., and Markusen, J. R. (2007). Export-Platform Foreign Direct Investment. Journal of the European Economic Association, 5(4), 776–795.
Ernst and Young. (2012). European Investment Monitor. London: Ernst and Young.
Flam, H., and Nordstrom, H. (2007). The Euro and Single Market Impact on Trade and FDI.
Mimeo. Stockholm University: Institute for International Economic Studies.
Gould, W., Pitblado, J., and Poi, B. (2010). Maximum Likelihood Estimation with Stata. Texas:
Stata Press.
Greene, W. H. (1990). A Gamma-Distributed Stochastic Frontier Model. Journal of Econometrics, 46(1–2), 141–164.
Greene, W. H. (2011). Econometrics Analysis. New Jersey: Pearson Education.
Head, K., and Mayer, T. (2004). Market Potential and the Location of Japanese Investment in the European Union. The Review of Economics and Statistics, 86(4), 959–972.
Hornok, C. (2008). Trade Without Borders: Trade Effect of EU Accession by Central and Eastern European Countries. Forum for Research in Empirical International Trade, Working Paper No. 30.
Hummels, D., Minor, P., Reisman, M., and Endean, E. (2007). Calculating Tariff Equivalents for Time in Trade. Arlington, VA: Nathan Associates for the United States Agency for International Development.
Kalotay, K. (2008). Russian Transnational and International Investments Paradigms. Research in International Business and Finance, 22(2), 85–107.
Krugman, P., and Venables, A. J. (1990). Integration and the Competitiveness of Peripheral Industry. In C. Bliss, and J. Braga De Macedo (Eds.), Unity with Diversity in the European Economy: The Community's Southern Frontier. Cambridge: Cambridge University Press.
Lankes, H.-P., and Venables, A. J. (1996). Foreign Direct Investment in Economic Transition:
The Changing Pattern of Investments. Economics of Transition, 4(2), 331–347.
Magerman, G., Studnicka, Z., and Van Hove, J. (2015). Distance and Border Effects in International Trade: A Comparison of Estimation Methods. Economics Discussion Papers, No 2015-69. Kiel: Kiel Institute for the World Economy.
McCallum, J. (1995). National Borders Matter: Canada-US Regional Trade Patterns. American Economic Review, 85(3), 615–623.
Millar, J. N., Oliner, S. D., and Sichel, D. E. (2012). Time-to-Plan Lags for Commercial Construction Projects. Finance and Economics Discussion Series, 2012-13. New York:
Federal Reserve Board.
Neary, J. P. (2008). Trade Costs and Foreign Direct Investment. In S. Brakman, and H.
Garretsen (Eds.), Foreign Direct Investment and the Multinational Enterprise. Cambridge:
MIT Press.
OECD. (2014). International Investment Stumbles into 2014 After Ending 2013 Flat. FDI in
Figures, April. Paris: Organization for Economic Cooperation and Development.
Resmini, L. (2000). The Determinants of Foreign Direct Investment in the CEECs: New Evidence from Sectoral Patterns. Economics of Transition, 8(3), 665–689.
Rode, M., and Gwartney, J. D. (2012). Does Democratization Facilitate Economic Liberalization? European Journal of Political Economy, 28(4), 607–619.
Serwicka, I., Jones, J., and Wren, C. (2016). The Motives for the FDI Location Choice in the
‘Old’ and ‘New’ Europe. In J. Jones, and C. Wren (Eds.), Understanding the Location of Foreign Direct Investment. London: Palgrave Macmillan.
Serwicka, I., Jones, J., and Wren, C. (2017). Economic Integration and the Asset-Exploiting Motives for FDI location: Evidence from EU Enlargement. mimeo.
Simar, L., and Wilson, P. W. (2010). Inferences from Cross-Sectional, Stochastic Frontier Models. Econometric Reviews, 29(1), 62–98.