Foreign Direct Investment In Romania Research Articles

Foreign Direct Investment in Romania: Impact on the Agro-Food Sector

Foreign Direct Investment in Romania: Impact on the Agro-Food Sector

General Assessments Regarding the Evolution of Foreign Direct Investments in Romania

The article makes a critical analysis of the attractiveness of the Romanian legislative framework for foreign investors. The analysis goes beyond national borders and extends to Bulgaria, the Czech Republic, Poland and Hungary, as we believe that the states in the region, EU members and with a similar transition history, are formidable rivals for Romania in the race to attract FDI, able to capture the advantages of this type of investment to the detriment of Romania. In this part we emphasize the fact that, in the absence of increased attention paid to these issues, Romania risks losing its attractiveness for FDI, with negative consequences on its economic development. The research methods included observation methods, comparison methods and generalization methods, and the result of the research is its own considerations regarding the controversies of investment policy and FDI determinants, the controversies of the globalization process, the role of FDI in the global economy, such as and their positive role in modernizing Romania and enhancing future opportunities in the national economy.Keywords: foreign investors; economic development; FDI; transition; investment 

FOREIGN INVESTMENTS IN THE ECONOMY OF EASTERN EUROPEAN COUNTRIES

Foreign direct investment (FDI) has been debated by many specialists being considered in most cases a source of development for the receiving countries. From this perspective the study is a comparative analysis of FDI evolution in Eastern European countries and an analysis of FDI in Romania. The analysis was carried out over a period of five years and allowed us to obtain useful information regarding the FDI volume expressed in % of GDP, FDI structure and structure of activities in Romania considered attractive for FDI, respectively FDI distribution in the regions of Romania.

Causal Links between Trade Openness and Foreign Direct Investment in Romania

In this increasingly globalized era, foreign direct investments are considered to be one of the most important sources of external financing for all countries. This paper investigates the causal relationship between trade openness and foreign direct investment (FDI) inflows in Romania during the period 1997–2019. Throughout this study, Trade Openness is the main independent variable, and Gross Domestic Product (GDP), Real Effective Exchange Rate (EXR), Inflation (INF), and Education (EDU) act as control variables for investigating the relationships between trade openness (TOP) and FDI inflow in Romania. The Auto Regressive Distributed Lag (ARDL) Bounds test procedure was adopted to achieve the above-mentioned objective. Trade openness has negative and statistically significant long-run and short-run relationships with FDI inflows in Romania throughout the period. Trade openness negatively affects the FDI inflow, which suggest that the higher the level of openness is, the less likely it is that FDI will be attracted in the long run. The result of the Granger causality test indicated that Romania has a unidirectional relationship between trade openness and FDI. It also showed that the direction of causality ran from FDI to trade openness.

Efectul moderator al angajamentului organizațional asupra relației dintre sursele de presiune si consecințele stresului, în cazul unei achiziții internaționale


 Mergers and acquisitions are corporate events with the potential of creating a high level of stress, with psychological, behavioural and physical consequences, raising problems to both: the functionality of the individuals and of their organizations. In the context of growth of foreign direct investments in Romania and the lack of researches conducted on this type of organizational combinations, this study aims to identify the main stressors associated with the acquisition of a Romanian company by a foreign investor and the moderating effect of organizational commitment of the stress – outcomes relationship. The research was based on the stress model developed by Cartwright & Cooper (2002). The results revealed a moderate level of stress, moderate personal health and a low level of organizational commitment. We did not find support for the moderator role of organizational commitment on the stress-outcome relationship. Only the direct effect of stress on physical health and psychological wellbeing were supported. The hierarchical regression revealed that the perceived commitment of the organization toward its members moderates the stress - health relationship. We regard these results as optimistic, suggesting possibilities of managing the post-acquisition integration process in a manner that diminishes the negative consequences generally associated with these changes.
 

Globalisation, Trade Openness and Foreign Direct Investment in Romania

Abstract The paper analyses the trend of globalisation, trade openness and foreign direct investments (FDI) in Romania and the link between them in the last 25 years. Data from UNCTAD, World Bank and KOF globalisation index were used in econometrical models testing the link between globalisation, trade openness and foreign direct investment. A strong positive and statistical validated link is found between globalisation and FDI, between trade openness and FDI, and between FDI and globalisation. In the context of Romanian economy, these three phenomena are interrelated and each of them is acting to potentiate the effect of the other. Moreover, a multivariate regression analysis emphasized the dependency between globalisation index and foreign direct investment, trade openness and market capitalisation. These results can be taken into account when national policies aiming to attract FDI and stimulating export-import activities are designed.

The Future of Intra-European Union BITs: A Recent Development in International Investment Treaty Arbitration against Romania and Its Potential Collateral Damage

The article explores the debate surrounding intra-European Union (EU) investment treaty arbitration and the intervention of the European Commission in an investment treaty arbitration against Romania. The European Commission has demonstrated great appetite to pursue its own agenda in multiple proceedings generating an outcome which, it is argued, is likely to lead to an uncertain future for foreign direct investment in Romania and several other Member States. The article warns that if the Commission is not prepared to countenance that international law obligations can prevail over EU law (at least in so far as it is interpreted by the Commission) a dangerous precedent may be set and there could be adverse consequences for the rule of law.

Analysis of the Trade Balance of the Enterprises with Foreign Direct Investment in Romania

Abstract The purpose and objectives of the present paper highlight the main aspects regarding the development of the enterprises with foreign direct investment in Romania related to the contribution that they have had or may have on the economic development of our country. In this research, we intend to analyze the dynamics and structure of foreign direct investment in Romania, from the point of view of their impact on the net income of the trade balance in the case of companies with foreign capital participation in our country. We have analyzed the exports and imports of enterprises with foreign direct investment at an overall level, and at industry level, of which manufacturing and other activities.

FDI Territorial Distribution in Romania

Abstract Our previous research focused on highlighting the impact of financial crisis on foreign direct investments (FDI) level in Romania and Central and Eastern European (CEE) countries. Going further, this paper aims to analyze in more detailed the impact of major macroeconomic factors on territorial distribution of FDI in Romania, during the period 2006 – 2012. We must be aware that, FDI can be influenced by investments made by the public authority regarding the infrastructure, education or other social aspect. In this context, in order to improve the level of FDI in a specific region, we have to know what will be most viable tool to utilize to achieve it. For accomplishing this, we will use a regression model and panel data methodology, which will help us to identify the influence of several macroeconomic variables on FDI value recorded by each region. The present study is important in supporting the regulatory environment, in order to attract more FDI, as a solution for economic development of specific regions.

Do Confidence Indexes Consider the Available Macroeconomic Information on Short Term?

Abstract The question whether investors are rational or irrational has already been extensively discussed in specialized literature. But no final answers were received during the few decades of research. This paper represents a research of what factors influence investors’ opinions regarding expectations of future evolution of an economy. This subject is important because investors’ overconfidence can cause economic bubbles that may severely affect a capital market ( Brown and Cliff, 2004 ). A lack of confidence may also have a series of negative impacts on a market.The study focuses on Romania, by using the CFA Romania Macroeconomic Confidence Index in an empirical research to find whether past events influence financial analysts regarding future expectations and which of these factors influence them most. The sample of research consists of three years of monthly data regarding the CFA Romania Macroeconomic Confidence in correlation with a few distinct macroeconomic figures (monthly information about unemployment rate, average personal income, inflation rate, short term interest rates, index performance for Bucharest Stock Exchange, foreign direct investments in Romania as well as Romanian business condition).After performing the Jarque–Bera test of normality and after testing the data for autocorrelation, cross correlation, multicollinearity, the analysis of correlation and regression was performed. The conclusion is that financial analysts are influenced by past economic data in the moment they form their expectations about future economic conditions. As a result, they may be considered as being rational. There is a high correlation between the CFA Romania Macroeconomic Confidence Index and the considered macroeconomic indicators.

ECONOMIC CRISIS AND FOREIGN DIRECT INVESTMENTS IN ROMANIA

Foreign direct investments represent an essential factor of economic development and growth at all levels: national, regional and local (county). The authors analyse the evolution of foreign direct investments in Romania over the last decade, taking into consideration the influence of the economic and financial crisis, different territorial levels, types of foreign investments, the economic activities and also the main countries of origin. The aim of the paper is to explain some of the reasons for the illustrated evolution of FDI and to reveal some policy implications for the future period.

RISK AND FOREIGN DIRECT INVESTMENT IN ROMANIA

This paper tries to present the main categories (types) of risks that affect the inflows of foreign direct investment (FDI) in Romania, such as: country risk, political risk, economic risks, sovereign risks and so on. FDI is an important factor contributing to the economic development and to the economic growth of a country. In order to recuperate its economic handicap as compared to the other countries in the EU, Romania needs a massive inflow of foreign capital, especially in the form of direct investment. The paper also presents the evolution of FDI inflows in Romania and how they were influenced by the main factors affecting the FDI. In principle, between risk and the level of FDI inflows there is a direct dependency relationship: the higher the risk is in a country, the lower the level of FDI inflows is in that country. This is demonstrated by the empirical studies regarding FDI. These studies show that countries with high risk have major difficulties in attracting foreign investment. Therefore, it is important to identify very precisely the main risks that may affect the level of FDI inflows in Romania, in order to propose and implement strategies to mitigate these risks and to attract more foreign direct investment in Romania.

Patterns of Foreign Direct Investment in Romania: Low Tech Investments versus High Tech Investments

Foreign direct investment (FDI) has gained significant importance over the past decade as a tool for accelerating growth and development of economies in transition. The Eastern-European countries were the destination of some significant capital inflows because of some important features of each market, as: development level of the infrastructure, labor force characteristics, market size and its future development potential, regulation level of the market, liberalization level of the prices, tax policies and technology absorption capability.When talking about foreign direct investments it is very important to analyze the level of technology of the investment because that particular characteristic can provide a very clear description of the development level of the chosen region. Therefore the main goal of this research paper is to provide a clear description of the similarities and of the differences of the two investor types (low tech, high tech), both at national and regional level.

The Regional Location Decision of Foreign Direct Investments in Romania

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.

Main Determinants of Foreign Direct Investments in Romania - A Quantitative View of the Regional Characteristics Involved in the Investment Strategies of Foreign Companies

Several variables have been identified in the literature as important determinants of the foreign direct investments in a specific region. Identifying these characteristics (characteristics emphasized at regional level) that determined the foreign companies (from the manufacturing industry) to invest in Romania is extremely important in the current economic situation, when the foreign investments are considered to be one of the most important levers that can restore the balance in the Romanian economy and can serve as the base for sustainable economic growth. Shaping the profile of the foreign investor in Romania, based on the main factors taken into consideration by companies when building their investment strategies, is the main goal of this paper. The survey described in this study is conducted on a sample of 235 companies which met the defined criteria (having more than 100 employees, being a foreign investment, being active at least until 2009, activating in the manufacturing industry). The obtained data were analyzed with the SPSS software package and the results obtained were used to provide a map of the main factors used by a foreign entity when developing its investment strategy.

French Foreign Direct Investments in Romania: What are the Determinants and the Impacts?

The foreign direct investment (FDI) towards the Central and Eastern European Countries (CEECs) opens to us a particularly rich field of research, in the current context of the globalization. Closed before 1990 for the foreign capital entries, the CEECs attracts now important volumes of FDI. Many governments from these countries offer important incentives to attract more FDI, being motivated by the positive effects expected to rise on the local economy. But the flows of FDI received by the CEECs know an uneven distribution between the countries of the region, Romania appearing among the last ones.This paper will concentrate on the Romanian case. By exploiting the results of our survey on the French firms settled in Romania, this paper tries to analyze two categories of questions: (1) what are the main factors which determine the entry of investments towards Romania and (2) what are their impacts in the host economy, in that case, in Romania?

Foreign Direct Investment in Romania: Challenging the Romanian Legal Framework Using the Delaware Model of Company Law

Empirical data suggest that foreign direct investment tend to flow in countries with strong corporate governance. This work explores means to attract FDI from a corporate law perspective. I suggest a comprehensive set of rules that would make Romania more attractive from the perspective of business ventures' institutions. The general policies that are developed here refer to improvement of corporate governance and promotion of partnerships as an alternative for close corporations. The model law that I follow is the one of the US State of Delaware, due the reputation of this State to attract business ventures for incorporation. Its legal system is known to be very liberal, in the sense that partners within partnerships or shareholders of close corporations have a large spectrum of alternatives to shape their business venture as they deem appropriate. Alternatively, large public held corporations tend to incorporate in Delaware because the legislation defends the power of the Board to manage a business without interference from the shareholders, as long as the directors fulfill their fiduciary duties.The current work is structured in three titles. The first title introduces the reader in the context of FDI, presents the current situation in Romania, and the history of FDI in Romania since its formation as a modern state.The second title refers to the financial decisions to be undertaken by a foreign person for the purpose of establishing a subsidiary in Romania. Capital formation is approached in a critical manner, by comparing the requirements in Romania and the practices in international environment (or in US), suggesting few changes that should increase the confidence of foreign investors in the Romanian corporate environment. Then, I present the guarantees and facilities that are offered by the Romanian state to foreigners, or the limitations that may be encountered by foreign business people when planning to develop a business in Romania.The third chapter is the core of the dissertation. After introducing the reader with the theoretical premises of the discourse, I expound the company law in Romania, comparing it with the one existent in Delaware. Aiming to make the entire Romanian company law more attractive then the one in other CEE countries, I start analyzing partnerships as an alternative mean to develop small businesses. I try to circumvent the primary odd of partnerships, the joint liability of general partners, by suggesting exceptions from the rules related to their liability, and expanding the flexibility of provisions dealing with partnerships' organization. Then I explore the corporate entities, following the same line of critical analysis, starting with the need and means to decrease formalism of incorporation process. When I turn to the role of corporate bodies, I stand on two hypothesis: one is the separation of management powers from shareholders' rights; the second is the improvement of transparency in decision making process. I address issues like effectiveness of voting procedures, protection of minority shareholders, prevention of abusive conduct of the Board. All suggestions I make, preserve the context of Romanian and continental European legal traditions.