The Effects on American Foreign Direct Investment in the United Kingdom from Not Adopting the Euro

Abstract: The decision of the United Kingdom not to adopt the common European currency can be understood as a policy intervention in a single country within the European Union. The aim of this article is to analyse the consequences of this decision on the foreign direct investment received by this country. This is done by the application of a synthetic control method designed for policy evaluation. As a result, evidence of a significant cost in terms of inward foreign direct investment from the United States is obtained.

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