The Regional Location Decision of Foreign Direct Investments in Romania

Abstract

The regional attraction of foreign direct investments is expected to evolve into an enhancement of local advantages. In this paper we identified the most important benefits which brought the most significant impact on the number of newly established companies with foreign capital at regional level in Romania. Using a nested logit model we described a two stage decision process where the investor first chooses a group of regions with common characteristics, such as the closeness to the capital or to the main transportation routes, and then chooses the specific region from within this group. The main factors of attractiveness are identified in order to be used for stimulating a more equal regional development. Reducing disparities in this way can help to a more advanced economic development of the foreign direct investments’ host country.the paper, comprising about 100 words, should include the purpose and the aims of the paper, methods used, paper structure, basic results, and the conclusion concerning the possible application of the results and the conclusion concerning the possible application of the results.