FOREIGN PARTICIPATION IN THE SHARE CAPITAL OF COMPANIES IN ROMANIA – A REGIONAL ANALYSIS

Abstract

There is a broad consensus in the field literature regarding the positive effects of foreign investments in the economy at the national and regional level. Foreign investments are considered an engine of economic development, a sine qua non condition for the general wellbeeing, especially in countries involved in catching up process. When we refer to regions, we can not overlook the existing disparities. Interregional disparities exist also in terms of foreign investments attracted. In this paper, after presenting some economic indicators that outlined the level of development of the regions, it was conducted an analysis of the distribution and evolution of the the value of subscribed capital and of the number of companies with foreign participation in the share capital registered in Romania, by development regions. During the analyzed period, 2001-2019, there was an upward trend in all the development regions in terms of the value of subscribed capital in companies with foreign participation. However, the difference between the Bucharest-Ilfov region and the rest of the regions is striking. The results showed that Bucharest-Ilfov region attracted the most in what concerns foreign investment. More than half of the foreign participations in the share capital were made in this region. The second position, in terms of the value of subscribed capital, is occupied by the Center region and the third by South-Muntenia region. Regarding the number of registered companies with foreign participation in the share capital, Bucharest-Ilfov region also dominates, being the most desirable region of development for the foreign investors who want to invest in Romania. West and North-West regions are placed on the second, respectively third position. South-West Oltenia development region is placed on the last place, both in terms of the number of companies registered and of the value of subscribed capital. This analysis revealed the major disparity between the Bucharest-Ilfov region and all the other development regions regarding the foreign investments attracted in the form of the participations in the social capital. This gap has accentuated during the last decade, the rhythm of growth being much higher in Bucharest-Ilfov region compared to the other development regions.