The FDI profile in the Romanian manufacturing sector

Aniela Raluca Danciu () and Vasile Alecsandru Strat
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Aniela Raluca Danciu: Academy of Economic Studies, Bucharest, Romania
Vasile Alecsandru Strat: Academy of Economic Studies, Bucharest, Romania

Review of Applied Socio-Economic Research, 2012, vol. 4, issue 2, 57-64

Abstract: The beneficial impact of FDI was especially important for the transition economies in Central and Eastern Europe, in need for additional capital investment, as well as access to foreign technology and management techniques in order to modernise and improve their economies and narrow the development gaps. Foreign capital played a decisive role in the reshaping of the transition economies in Central and Eastern Europe. Among the benefits from FDI there were also some indirect effects on local firms, such as increased local competition that force other firms to improve their economic performance. The countries in Central and Eastern Europe have been recipients of large foreign capital inflows, driven by the several factors such as: market size and its potential development, factor costs, especially labor cost, but also human capital (education and skills), trade openness, infrastructure reform, price liberalization, fiscal policy, institutional development, technological absorption capacity. The combination of all these factors explains why foreign investors decide to invest in a certain area. Predominance of one or the other of the basic factors and motives in the firms' decision give a certain profile to the respective investment. This paper is aiming to explore the underlying factors that drive the FDI behavior in Romania, in the manufacturing sector. We based our estimation on the firms' answers regarding the importance of the different factors for the decision to invest in Romania.

Keywords: foreign direct investment; FDI behavior; types of large FDI; Cluster Analysis (search for similar items in EconPapers)
JEL-codes: C38 F21 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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