We invite you to read the latest article by Dr Aleksandra Borowicz, a member of the CEWSE II project team.

Borowicz A. (2026). International Investment and Economic Resilience: Evidence From Inward and Outward FDI in EU Economies. Studia Europejskie – Studies in European Affairs, 2/2026, 329-350. DOI: https://doi.org/10.33067/SE.2.2026.16

Abstract:

The aim of this article is to assess whether the integration of European Union (EU) economies into international investment flows, measured by stocks of inward (IFDI) and outward foreign direct investment (OFDI) relative to GDP, is associated with economic growth and the resilience of GDP dynamics. The study is motivated by the growing importance of economic resilience in European policy debate, particularly in the context of competitiveness, economic security, and the ability of economies to respond to external shocks. In this context, resilience should be understood not merely as a positive effect of FDI on GDP growth, but also as greater stability of economic performance, reduced vulnerability to fluctuations, and an enhanced ability to restore economic momentum following periods of disruption.

The study employs both qualitative and quantitative research methods. The qualitative component includes a review of the literature on FDI, economic growth, and economic resilience, as well as an analysis of selected European Union (EU) strategic documents addressing competitiveness and resilience. The quantitative analysis is based on Eurostat panel data for EU Member States covering the period 2014–2024 and includes Pearson correlation analysis, scatterplots, and baseline regression estimations. The findings indicate that the relationship between FDI and GDP growth is relatively weak and ambiguous. While IFDI exhibits a modest positive association with growth dynamics, OFDI does not demonstrate a statistically meaningful relationship with either economic growth or resilience. Moreover, countries with higher levels of integration into international investment flows do not appear to experience lower GDP growth volatility. These results indicate that FDI should not be regarded as an automatic determinant of economic resilience. Rather, its contribution depends on factors such as the quality of investments, its degree of embeddedness in the domestic economy, sectoral structure, and the absorptive capacity of a host country.