FDI Determinants: Case of Romania |
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Authors: | Maria Birsan Anu?a Buiga |
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Institution: | (1) Centrul de Studii Europene, Al.I.Cuza University, Iasi, Romania;(2) Faculty of Economics and Business Administration, Babeş-Bolyai University, Cluj-Napoca, Romania |
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Abstract: | Even if the FDI is important for all host countries, for those in the process of transition to a market economy the FDI presence
is critical under many respects. Not all transition countries benefited from the very beginning from the FDI presence. Several
determinant factors explain the differences. Romania was lagging behind regarding the interest of foreign investors during
the first 9–10 years of transition. The situation has improved greatly. The aim of this paper is to identify the main factors
determining the evolution in the FDI/GDP (%) as proxy for the FDI evolution. To this end, we used the method of factors analyses.
The four resulted determinant factors are: Market size and potential, Reform progress, Business liberalization, and Labor
cost. A linear regression model expresses the connections between dependent variable and the four determinant factors. The
paper concludes with certain policy implications.
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Keywords: | FDI in Romania Reasons for FDI Factor analyses Regression analyses Main determinants |
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