Foreign Investments in the Economy of Eastern European Countries

Annals - Economy Series, 2012

Foreign direct investments represent the most important and stable source of external financing of all states of the world, irrespective of their level of development. In Romania’s path from the elimination of the centralized economy and up to nowadays, foreign direct investments were also a source of economic growth, a financing source, and a means of acceleration in the process of transition, a contributor to the capitalization of the wealth of the country but also a real barometer of the economic situation. The aim of this article is to analyse the foreign direct investment flows in the Romanian economy after 1990 according to the 3 stages of qualitative evolution of the Romanian market economy : the period of transition to the market economy (1990-2003), the period of the market economy, of pre-accession to the Union (2004-2006), the period of the first 4 years of membership in the European Union (2006-2010), the main focus of the research being on outlining the place of the nat...

RePEc: Research Papers in Economics, 2008

Last year, Romania ranked among first countries in the region as receiver of foreign direct investments and the positive signals from those who have a hard word to say regarding business community didn't delay to appear. Prestigious international companies choose Romania, and today our country is already checked out on the international map of success locations as attractive destination for capital placements. You exist as a country, as destination in the business environment when you prove as country and to those from exterior when they look at you, that you can offer, you can assure the premises and the necessary frame for obtaining profit. 2007 proved not only that Romania exists as a country from the point of view of business destinations, but is situated on a much honorable position in front of the big international "players" which grants Romania today maybe the most valuable country rating: the respect. The present policy of foreign direct investments in Romania was conceived for attracting foreign investors. Romania's economic potential is attractive through the internal market dimension (second market from Central Europe after Poland), through the high level of qualification of labor force, through the importance of existing resources and not in the last place through the proximity from the Occidental Europe countries, which represents the investment sources. The improvements of the business environment, the effects of introducing the unique quote of taxation and the positive attitude of foreign partners toward Romania conduced to the accented increasing of foreign direct investments in the last years. Each foreign investment represents an investment in Romania, in the people of this country, in its capacity to become a credible partner for the international business environment representatives. Investments are those which locate you on the map. It represents the barometer, the "health" of a nation.

2010

Identification of potential investment of the countries in the current context is one of the main important problem of the world economy because the investments, particularly foreign ones, is considered the key factor for economic growth and development. Foreign direct investments are an alternative source for financing the national economy, with a tendency in recent years of a positive effect on the Romanian economy. This paperwork highlights the role of foreign direct investment in Romania's economical growth potential, with major impact on employment, on the economic modernization, technology transfer and on the living standards. At the same time the article analyzed and highlights the contains of the current trend of foreign direct investments, structure and dynamics after Romania joined the European Union and their geographical distribution on the main development regions. Keywords: foreign direct investments, role of foreign direct investments, development regions, economic growth JEL Classification: R12, E22 C CE ES S W Wo or rk ki in ng g P Pa ap pe er rs s, , I II I, , ( (4 4) ), , 2 20 01 10 0 120 An accelerated growth in recent years has placed Romania among attractive FDI destinations. Consequently, the investors interest in Romania has increased steadily in recent years. Cheap and skilled workforce, low taxes, improving the business environment, the positive attitude of foreign partners and favorable geographical location are the main advantages of Romania for foreign investors. Thereby, as can be seen above, Romania has registered an upward trend in attracting foreign direct investment. In 2008, Romania attracted investments worth EUR 9496 billion placing her an enviable position on the statistics that analyzes foreign direct investment flows in South Eastern Europe. As expected, the economic crisis has affected the amount of FDI attracted by Romania, in 2009 recorded a drop regard previous year, leading to the 4556 billion euros. The number of FDI projects has almost halved in 2009 in Romania, while the volume of newly created jobs has decreased by 44%, according to a study released by Ernst & Young. Romania recorded in 2009 a 48% reduction of the number of FDI projects and a deceleration of 44% in the creation jobs, compared to 2008. According to that study, in 2009 Romania has attracted 75 foreign direct investment projects, representing 2% of the total projects in Europe, and generated 6384 new jobs, or 5% of all Europe. Thereby, in 2009 Romania ranked seventh in the European rankings in creating jobs, respectively, ranked 11th by token of the market share in total FDI. The same study shows that in 2008 in Romania were created 11,403 new jobs through the 145 FDI projects. Despite the rather difficult period our country is passing through, Romania is still considered an attractive destination for industrial projects, in 2009 Romania drew about 7 percent of total European investment projects. In 2009, FDI in Romania was also decrease by 48,4% from 2008, to 4556 billion Euros, according to statistics of the national bank. Investments financed the current account deficit at a rate of 96,9% last year. Intra-group loans accounted for 37,4% of FDI, amounting to 1834 billion Euros and equity, including reinvested profits, 62,6%, or 3065 billion Euros in 2009, according to statistics of National Bank of Romania. From the point of orientation for foreign investors into industries (according to NACE Rev. 2), FDI was located mainly in industry (41% of total). On the next place is filled by the financial and insurance sector, followed by construction and real estate, commercial, and telecommunications. Within industry, manufacturing industry attracted the largest volume of investment (31,1%). C CE ES S W Wo or rk ki in ng g P Pa ap pe er rs s, , I II I, , ( (4 4) ), , 2 20 01 10 0 Ivan, M. V., Iacovoiu, V. (2008) Rolul investiţiilor străine directe în contextul obligativităţii indeplinirii criteriilor de convergenţă, Studii financiare.

2019

Nowadays, the development of each country is conditioned by the existence of the capital. The public sources of investment are frequently limited depending on the different interests, so the foreign direct investment represent an important source for economic growth including in the period when the economic stability is in danger. The main objective of this paper is to evaluate the impact of the foreign direct investments in Romania and to offer a clear image on the effects resulted from the activity of the companies with foreign capital present in Romania. We will present the effects of the foreign direct investments in general trying in the same time to emphasize the results of the companies with foreign capital compared with the Romanian ones.

Procedia Economics and Finance, 2015

Foreign Direct Investment (FDI) plays an important role in the development of national and regional economies and it has been considered a force for European Union integration, especially for developing regions. More, the FDI represent a key-tool for sustain development and economic growth at regional/local level. Foreign firms bring new technologies, knowledge and management skills, and local firms can learn from this. Therefore, the presence of foreign firms can improve region's competitiveness, but fears can also be raised that foreign competitors crowd out local firms, and a net positive effect on the regional economy cannot be taken for granted. The understanding FDI determinants for development regions represent a field of interest both policy makers and investors because they are a particularly driven to market globalization. This study provides an empirical analysis of FDI at regional level (NUTS 2 regions) in European Union and Romania.

Annals of University of Craiova Economic Sciences Series, 2008

Romania attracted large inflows of foreign direct investments (FDI), thanks to an improved business environment and still-low labor costs. Romania offers to the foreign investors many major reasons to invest in Romania: great market potential, strategic location, significant natural resources, high skilled labor force, high potential for economic growth, new EU member, infrastructure growing steadily, friendly business environment, access to European funds, competitive taxation. But still there are possible many contradictories evolutions generated both by Romanian government decisions and by the influence of the external factors. Virtually, the size on the above potential shows the countries with low FDI potential but strong FDI performance. The same time, the United Nations Conference on Trade and Development (UNCTAD) matrix considers that Romanian economy has less advantages than the Romanian Agency for Foreign Investment (ARIS) offers. Therefore, Romania is below potential wanted by foreign investors. Therefore many challenges must be addressed to enhance competitiveness and to attract additional FDI. The Foreign Investors Council (the FIC) from Romania believes that Romania must still improve the enforcement of new laws and regulations; tackle major social reforms, including reform of the labor market; increase its competitiveness and improve its infrastructure.

Ovidius University Annals: Economic Sciences Series, 2016

The arrangements of regional economic integration have substantially reconfigured the pattern of global economy after the Second World War, due to their structural effects, but especially to the new forms of interdependence which they have created between economies. Our study is based on the hypothesis that the economic integrated areas are more attractive to investors, especially to the large ones such as multinational corporations. Analyzing the flows, respectively the ratio of inward stock of foreign direct investment to GDP in EU, and Romania, as well as the main indicators assessing the presence of multinational corporations in the Common Market and in our country too, we have found that the creation of a larger market and deepening of economic integration has fuelled a stimulus for investments, although the preference of investors, especially of the nonEuropeans, have been quite highly concentrated on certain locations/countries.

A central objective of the paper is rendering an image of the international economic context and the location of Romania on international and EU economic stage and also a complementary analysis of external economic relations. Also, using the multidimensional analysis of the impact of FDI on the trade balance and on the current account it will classify and bring to date a number of relevant studies that capture the determinants of FDI for Romania. In addition, the paper will also touch another goal, namely, making forecasts that aim for future image on the impact of foreign direct investment in Romania from the EU.

Studies in Business and Economics, 2015

The economic theories consider the investments as one of the major factors of economic growth. Economic growth represents a complex process of increasing the dimensions of the national economy, based on the collective use of increasingly efficient production factors, dimensions expressed by the size of gross domestic product and national income per capita.

2012

After the year 2000, as business was improving and the flat tax was introduced, the positive perception of Romania by partners has attracted major capital flows in the national economy. Although industry is unanimously considered to be a major source of economic and social imbalance, yet in time it has proved to be by far more attractive to foreign investors than agriculture and tourism, which have a remarkable potential in this country. Major foreign investments are located in the main urban centres, because they are more easily accessible and more open to establishing relations and have a more dynamic economic milieu. Bucharest continues to hold a dominant position, either by hosting foreign companies, or simply their headquarters. Next come the regional capitals, basically cities with more than 300,000 inhabitants, with a large sphere of influence and capacity of coordinating the regional economic space. Moreover, present evolutions have shown that Romania is likely to loose its cheap labour advantage, a situation that makes its further attractiveness for international investment flows really questionable.

2010

Following the collapse of communism, the countries of Central and Eastern Europe, have been forging strategies to attract foreign capital as a way of achieving sustained economic growth (Martin and Velăzquez, 2000). Foreign direct investment by multinational corporations plays an important role in the transformation of former centrally planned economies into vibrant market systems, since it provides an inflow of

DESCRIPTION The paper studies the interdependence of the economy size and foreign direct investments (FDI) in the transitional economies of Central, Southeastern and Eastern Europe. In the global capitalist economy, foreign direct investments (FDI) represent one of the key determinants of economic growth. Among some transitional economies, in the last 20 years, FDI represented one of factors that increased the economic growth, and in other transitional economies, the influence of FDI was minor or even negligible. In the literature devoted to the influence of FDI on economies, the research about the determinants of geographical pattern of FDI distribution usually focuses on the factors that determine why some states manage to draw FDI in higher levels than some other states. Our research focused on the transitional economies of Central, Southeastern and Eastern Europe, which were for the most part of the last 20 years net receivers of the FDI. Only a couple of these countries in the ...

Journal of Economic and Social Development (Varaždin), 2016

The paper studies the interdependence of the economy size and foreign direct investments (FDI) in the transitional economies of Central, Southeastern and Eastern Europe. In the global capitalist economy, foreign direct investments (FDI) represent one of the key determinants of economic growth. Among some transitional economies, in the last 20 years, FDI represented one of factors that increased the economic growth, and in other transitional economies, the influence of FDI was minor or even negligible. In the literature devoted to the influence of FDI on economies, the research about the determinants of geographical pattern of FDI distribution usually focuses on the factors that determine why some states manage to draw FDI in higher levels than some other states. Our research focused on the transitional economies of Central, Southeastern and Eastern Europe, which were for the most part of the last 20 years net receivers of the FDI. Only a couple of these countries in the years of the...

Economic Insights – Trends and Challenges, 2021

The aim of this study is to investigate the determinants of FDI inflows in Romania. Data was collected from the UNCTAD and WDI from 1990 to 2018, and econometric technique was utilized to address the objective of the study. Consequently, there exists a negative relationship between FDI inflows, growth rate and market size in Romania. However, GDP per capita and per capita growth has a positive relationship with FDI inflows. Furthermore, it could be established that there is an existence of a unidirectional causality which runs from FDI inflows to economic growth. Therefore, the policy makers in Romania should ensure the sustainable growth of GDP per capita and capita per output in the country. Also, as a matter of urgency the authorities in Romanian economy should embark on aggressive policy that will expand the market size and ensure a sustainable rate of economic growth in the country.

2009

Foreign direct investment played a vital role in the economic transformation of the Central and Eastern European countries. It was also a crucial factor in the modernisation of Spain after its accession to the EU. This paper gives an overview on the development of foreign direct investment in the Central and Eastern European countries (Poland, Czech Republic, Slovakia, Hungary, Slovenia, Bulgaria and Romania) compared to Spain. The characteristics of FDI inflow and outflow are shown separating three periods since 1995. Afterwards certain main effects of FDI on the host economies are briefly mentioned.