Determinants of Foreign Direct Investment in Romania: A Quantitative Approach

Amfiteatru Economic, Vol. 19, pp: 275-287, 2017

13 Pages Posted: 8 Feb 2017 Last revised: 28 Feb 2018

See all articles by Calcedonia Enache

Calcedonia Enache

University of Agronomic Sciences and Veterinary Medicine of Bucharest

Fernando Merino

University of Murcia - Department of Applied Economics

Date Written: 2017

Abstract

This study aims to examine the dynamic relationship between foreign direct investments (FDI) and economic growth, using the Structural Vector Autoregressive model, in the period 2007-2014 in Romania.

The results of the econometric model show that the trajectory of FDI has its own origins, with reduced influences from economic growth. Another important conclusion is that there is a unidirectional causal relationship from the economic growth towards FDI, more precisely the influence of FDI on economic growth does not have a systematic, anticipatory nature. These results were achieved in the condition that, in the analyzed period, the net inflows of FDI were influenced by the lack of certainty on the sustainable re-launching of the economic growth both domestically and internationally, the segmentation of the financial market, the domestic structural reforms.

Keywords: FDI; economic growth; vector autoregressive model; Sims-Bernanke decomposition

JEL Classification: C18; E43; F21

Suggested Citation

Enache, Calcedonia and Merino, Fernando, Determinants of Foreign Direct Investment in Romania: A Quantitative Approach (2017). Amfiteatru Economic, Vol. 19, pp: 275-287, 2017, Available at SSRN: https://ssrn.com/abstract=2913419

Calcedonia Enache (Contact Author)

University of Agronomic Sciences and Veterinary Medicine of Bucharest ( email )

Bulevardul Marasti nr. 59
Bucharest, 011464
Romania

Fernando Merino

University of Murcia - Department of Applied Economics ( email )

Campus Espinardo
30100 Murcia
Spain

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