Empirical Analysis of Foreign Direct Investments at NUTS 2 Region, in European Union and Romania

Abstract

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.