Economic Growth, Foreign Investments and Exports in Romania: A VECM Analysis
Oana Popovici and
Adrian Cantemir CÄƒlin
Authors registered in the RePEc Author Service: Adrian Cantemir Calin
Romanian Economic Journal, 2016, vol. 19, issue 61, 95-122
The present paper deals with the relationship between GDP, FDI and merchandise exports using a vector error-correction model (VECM). The empirical model is based on quarterly data for the period 2005-2014 in Romania. The Granger causality test indicate a positive significant bidirectional relationship and between FDI and GDP and a unidirectional relationship between GDP and exports. The variance decomposition indicates that more than 50% of the fluctuations in FDI are explained by the shocks in GDP, while the influence of shocks in exports is quite low. Fluctuations in GDP are largely explained by the shocks occurring in this variable. As regards exports, 44% of fluctuations are due to FDI, while the impact of GDP reaches 13-15% after 10 quarters.
Keywords: VECM; GDP; foreign direct investment; export (search for similar items in EconPapers)
JEL-codes: C32 F10 F21 O11 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:19:y:2016:i:61:p:95-122
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