Growth In Romania Research Articles

Analysing the impact of the biomass sector on economic growth in Romania using econometric modelling

Abstract The growing importance of sustainable energy sources, driven by environmental concerns and energy security, has led to increased interest in the biomass sector's impact on economic growth. This study employs multiple linear regression analysis to examine how the biomass sector influences Romania's economic landscape. The aim of this research is to unravel the sector's dynamics, understanding its contribution to the national economy, and exploring its potential in advancing sustainable development objectives. A comprehensive literature review delves into past studies probing the relationship between the biomass sector and economic growth, with an emphasis on the Romanian context. Key economic indicators and variables are identified and included in the regression model. The empirical analysis is based on data obtained from various sources, allowing for a robust examination, and the results of the multiple linear regression analysis reveal significant insights into the dynamics of the biomass sector's impact on economic growth in Romania. Furthermore, potential confounding factors are considered, and their influence on the findings is discussed. The paper also includes a stakeholder analysis for using black pellets as the biomass option of choice in the energy sector. Contributing to existing knowledge, the research sheds light on Romania’s biomass sector specific context, while discussing practical and policy implications, and offering guidance to stakeholders and policymakers in sustainable energy and economic development. Emphasising the pivotal role of biomass in economic growth, the study underscores the need for informed decision making and policy development to nurture this sector in Romania.

Participation of Artificial Intelligence in Economic Growth in Romania

Participation of Artificial Intelligence in Economic Growth in Romania

Correction to “Outward foreign direct investment and economic growth in Romania: Evidence from non‐linear ARDL approach”

Correction to “Outward foreign direct investment and economic growth in Romania: Evidence from non‐linear ARDL approach”

Public Policy and Digital Government Public Framework in Romania during the pandemic.

Romania is currently suffering a significant digital divide, which hasbeen exacerbated by the COVID-19 pandemic outbreak. The core pointof this paper is an attempt to study governmental policies on aging anddigitalization in Romania. The current analysis intends to determinethe influence of a poorly built digital system in Romania regarding avulnerable category, such as the elderly population. What are Romania‘scurrent digitalization difficulties, and what solutions are available toimprove the lives of senior citizens with technology and digitalization?What are the most significant consequences of the COVID-19epidemic on the Romanian digital system? Is there enough potential fordigital growth in Romania, and if so, how might this element improvethe quality of life for the elder people? A review, synthesis, and analysisof the current literature are used to address the research questions. Thepaper is based on a secondary literature review research that aims toprovide insight into the Romanian scenario. The goal of this study is toidentify the barriers to technology use among Romanian older adultsand establish the framework for a larger investigation. The article willalso discuss the public policy in the digitalization process and in thesame time the impact of the pandemic‘s economic, social, cultural, andpolitical crises on the well-being and quality of life of the elderly.

Economic Growth Drivers in Romania: Evidence from a NARDL Analysis

The present study examined the impact of foreign direct investment, trade, final consumption expenditures, exports and imports of goods and services on the Romanian economic growth. The study used yearly data ranging from 1990 to 2020, and stationarity was checked using unit root testing. An asymmetric (non-linear autoregressive distributed lag) technique was employed to examine the relationship between variables with the estimation of short-run and long-run analysis. The findings of the short-run analysis show that the variables trade and final consumption expenditures positively impacted the economic growth in Romania through the positive and negative shocks. Further, the evidence also uncovered that foreign direct investment adversely influenced the economic growth, while the variable exports of goods and services revealed a significant influence to economic growth via positive shock. Imports of goods and services exposed a negative association via a positive shock and positive relation via a negative shock to the economic growth. Similarly, the long-run analysis also uncovered that variables trade and final consumption expenditures positively impacted the economic growth in Romania via positive and negative shocks, while the variable foreign direct investment showed negative linkage. Exports of goods and services uncovered a substantial influence on economic growth via positive shock, while imports of goods and services revealed a negative association via positive shock and positive linkage via negative shock to the economic growth. Foreign direct investment and imports of goods and services have a detrimental impact on Romania’s economic growth. In order to execute the right policies to solve trade and foreign investment uncertainties in Romania and boost economic growth, conservative measures are required.

Conflicting interests between local governments and the European target of no net land take

To halt land take in Europe, the European Union set a “no net land take by 2050″ target in 2011. However, land take continues to occur in European countries, with recent studies suggesting that local decision-making is playing a major role in these land-use conversions. In this study, we investigated how urban growth boundaries (UGBs) are used by local governments to manage urban growth in Romania. A mixed-method approach was adopted, combining analysis of UGB changes over the past decade in all Romanian cities (N = 319) with a survey among representatives of local governments involved in land-use decision-making (N = 91 cities). The results showed that many cities have expanded their UGBs, despite population loss and sufficient undeveloped land within UGBs, showing that local government decisions conflict with policy targets at the European level. This is even the case when there is no physical need for land-take limits to be exceeded. We show that population dynamics and the extent of nature conservation areas significantly contribute to UGB changes, though these explain just a small fraction of all UGB changes. Furthermore, we identified a wide range of motivations among decision-makers regarding changing UGBs, including not only the fiscal system but also cities’ competitiveness and decisions about the long-term vision for development. We argue that policy innovations in urban containment should (i) aim to balance the interests of governments at different administrative levels, (ii) account for the particularities of each state member’s planning system, and (iii) allow for integrated and strategic city planning.

Interest Rates and Economic Growth in Romania: Is There Cointegration?

Abstract This study aims to investigate the potential existence of a cointegration relationship between Romania’s gross domestic product (GDP), credit interest rates charged by financial institutions, and the benchmark interest rate set by the National Bank of Romania (NBR). The identification of a long-term relationship between these variables is considered to be of significant importance as it may provide a deeper understanding of the interactions between interest rates and GDP dynamics in Romania. To achieve this objective, we employed a robust econometric methodology, utilizing well-established and widely-used techniques for capturing long-term statistical relationships. Careful consideration was given to the manipulation of macroeconomic data in order to ensure the validity and reliability of the analysis. The results of our analysis reveal that there is no statistically significant evidence of a long-term relationship between GDP, credit interest rates, and the benchmark rate set by the NBR. This finding suggests that the interaction between interest rates and GDP in Romania is complex and may be influenced by other variables. Further research should focus on these other factors in order to gain a more comprehensive understanding of the relationship between GDP, credit interest rates and benchmark rate set by NBR.

The Impact of Digitalization and Patent on Economic Growth in Romania

The study aims to investigate the impact of patent and digitalization on economic growth in Romania. Our data was retrieved from the World Development Indicators database (World Bank 2021) from the period 1990-2020. Empirical fundings indicated that digitalization and patent have a positive effect on economic growth. From these perspectives, the Romanian authorities should take seriously the patent and the potential of digitalization which can help the economy to be modernized, diversified, and robust to create new jobs and to find new markets and new strategic partners, and new opportunities.

TOWARDS A RESILIENT AND SUSTAINABLE EMERGING ROMANIA

A bold future requires a generation of leaders who will look for solutions together in order to reach the EU goals for the 2021-2027 programming period, faster and more effectively. The scope of this paper is to raise awareness that a new transformational approach for emerging Romania is required in order to take advantage of the opportunities offered by the quick EU response to the pandemic crisis and the EU’s traditional financial support for its member states. This paper used a desk-research analysis of EU documents. Investments, funds, and financing available for Romania in the 2021-2027 programming period should be used wisely in order to contribute to the country's sustainable growth. Multilevel governance and coordination are the key factors to foster sustainable growth and the implementation of environmental, social, and governance practices. A positive change within the framework of new financing opportunities for the 2021- 2027 programming period is possible, only if leaders from different levels of governance collaborate, create, and share best practice on different topics of general interest in order to foster the social, economic, and democratic growth in Romania, achieving in this way the economic convergence with the western half of EU. The predictability of the politicosocial climate is a must, as well for business environment and also for investors, if the aim is to build a Romania that offers a secure, prosperous and inclusive future to all its citizens.

Establishing the Current State of Research on Urban Regeneration in Waterfront Cities

Abstract The purpose of this study is to combine two bodies of literature and theory: the first on urban change and coastal regeneration, and the second on the ideas of concerns that influence and shape urban regeneration practice. The goal of this paper is to conduct a review of the pertinent literature on this subject. It will analyze urban change theories as well as the key causes that have shaped transformation over the last few decades. Additionally, it aims to define urban regeneration functionally, to explain its principles and features, and to present a brief history of its growth in Romania. Finally, this work seeks to establish the research niche by examining the evolution of waterfront urban rehabilitation.

The Impact of the COVID-19 Pandemic on Electricity Consumption and Economic Growth in Romania

This paper analyzes the impact of the COVID-19 pandemic on economic growth and electricity consumption and investigates the hypothesis of the influence of this consumption on the gross domestic product (GDP) for Romania. Using time series on monthly electricity consumption and quarterly GDP and a multi-linear regression model, we performed an analysis of the evolution of these indicators for 2007–2020, a comparison between their behavior during the financial crisis vs. COVID-19 crisis, and empirically explore the relationships between GDP and electricity consumption or some of its components. The results of the analysis confirm that the shock of declining activity due to the COVID-19 pandemic had a severe negative impact on electric energy consumption and GDP in the first half of 2020, followed by a slight recovery. By using a linear regression model, long-term relationships between GDP and domestic and non-household electricity consumptions were found. The empirically estimated elasticity coefficients confirm the more important impact of non-household electricity consumption on GDP compared to the one of domestic electricity consumption. In the context of the COVID-19 pandemic, the results of the study could be useful for optimizing energy and economic growth policies at the national and European levels.

Critical analysis of key barriers and challenges to the growth of the biogas sector: a case study for Romania

Romania relies on a balanced mix of primary and renewable energy resources (biomass, hydropower, geothermal, wind, solar, and photovoltaic), evenly distributed across the country; it is one of the European country’s least dependent by energy imports. Biomass counts for the highest potential as a renewable energy source estimated at 318 PJ/year (7.6 Mtoe). Despite abundant bioresources availability, the biogas sector is very poorly developed; currently, the installed capacity of biogas projects is about 0.002% of the total installed capacity of renewable-based projects. This paper aims to analyze the key barriers that have impeded the development of the biogas sector in Romania, to identify corrective solutions, and draw remedial recommendations. The study indicates that the instability of the legal framework is the key barrier to the biogas sector growth in Romania, followed by financial obstacles, severe underfunding of the R&D budget, and poor communication between relevant stakeholders. Key recommendations have been proposed to overcome the obstacles, including ensuring a stable and consistent legislative framework, increasing funding in the research and innovation sector, and improving selective organic waste collection systems to facilitate feedstock supply. The study could be beneficial for policy-makers in adopting the best measures able to improve the current state and foster the biogas sector growth in the Romanian energy landscape.

Assessment of Economic Growth in Romania. Is it a Sustainable One?

Sustainable economic growth assumes interdependencies among social, economic, and environmental dimensions of growth. For Romania, in particular, the sustainable economic growth is both a challenge and an opportunity for prosperity. This paper aims at assessing the sustainability of economic growth in Romania in the period 1995-2019 by identifying the social, economic, environmental, and institutional drivers of the process of economic growth. Multivariate time-series analysis was used to analyse if the Romanian economic growth in the period 1995-2019 is sustainable. We also estimated the GDP per capita growth rate based on the determinants with which we found significant relationships.
 Keywords: sustainable economic growth; Romania, GDP per capita growth rate; socio-economic, environmental, and institutional factors; multivariate time-series analysis; multiple regression model

Outward foreign direct investment and economic growth in Romania: Evidence from non‐linear ARDL approach

AbstractGlobally, the outward foreign direct investment (OFDI) has significantly increased during recent years. In the light of OFDI's role in determining the GDP growth rate, it is necessary to assess how economic growth rate responds to such outflows. Based on the non‐linear autoregressive distributive lag (NARDL) model, the present study investigates the long‐run and short‐run asymmetric impacts of OFDI on the economic growth in Romania covering the period 1990–2019. The results indicate that both an increase and a decrease in OFDI have a positive and significant impact on Romania's economic growth, with a greater effect arising from the increase in OFDI. Our research adds to the preceding literature by providing new insights into the OFDI‐led growth hypothesis. The results of the present study portray the growth‐enhancing effects of OFDI, which are consistent with the notion that firms conduct OFDI in order to combine domestic output with overseas output to decrease expenditures and to enhance their competitiveness both at global and domestic levels. Thus, an increase in OFDI is both a cause and a consequence of the home country's economic growth.

New Evidence for Romania Regarding Dynamic Causality between Military Expenditure and Sustainable Economic Growth

Military spending and sustainable economic development have been widely discussed in recent decades. Especially in Romania, the defense budget is valued at $4.8 billion, registering a compound annual growth rate (CAGR) of 23.57%. It is also expected to reach $7.6 billion in 2023, according to a report by Strategic Defense Intelligence. There is no consensus in current research and less attention is paid to Eastern European countries. Considering the significant increase in military spending in Romania in recent years, as well as the occurrence of political events, this paper focuses on the dynamic causal relationship between military spending and sustainable economic growth in Romania. The bootstrap rolling window causality test takes into account the structural changes, and therefore, provides more convincing results. The results indicate negative effects of military expenditure on sustainable economic growth between 1996–1999 and 2002–2004. It can be attributed to the crowding-out effect of public expenditure on private investment. The positive effect between the two variables analyzed is noticed with the accession of Romania to the North Atlantic Treaty Organization. Conversely, it is found that economic growth does not have a significant effect on military spending in Romania. Policymakers should guard against the crowding out of private consumption and investment due to excessive military spending and ensure to increase military expenditure on the premise of sustainable economic development.

Estimating the effects of fiscal policy on GDP growth in Romania in 2015-2017 using the synthetic control method

ABSTRACT Using the Synthetic Control Method, we estimate the effect of a large package of expansionary fiscal measures implemented in Romania from 2015 onwards. We find that it had a large and significant effect on GDP growth, ranging from 4.4 to 5.5 percentage points, accumulated over three years, with the largest effect in the third year, i.e. 2017. In this way, we try to address an important puzzle that arises in Romania from the fact that, on the one hand, standard macroeconomic models find very small (or even insignificant) fiscal multipliers, while on the other hand policy papers tend to quote the country’s expansionary fiscal policy as a factor behind the high growth rates achieved.

The Impact of Interest Rate, Exchange Rate and European Business Climate on Economic Growth in Romania: An ARDL Approach with Structural Breaks

The role of the interest and exchange rates in sustaining economic growth has been a highly researched subject. Therefore, this study examines the influence of the monetary policy interest rate, the real exchange rate and the business climate in the Euro area on the economic growth in Romania. For this purpose, we have applied a pre-test for structural breaks to identify the existence of structural breaks, followed by the traditional unit root tests and the unit root tests with structural breaks to verify the stationarity of the variables. The results of the Bound cointegration test led to the autoregressive distributed lag (ARDL) short-run model that measures the short-run impact of the interest rate, exchange rate and the business climate in the Euro area on the economic growth of Romania. Our findings show that in the short run, the economic growth is negatively influenced by the interest rate, and positively by the exchange rate. We also indicate that the business climate in the Euro area has mixed effects on the economic growth. Finally, considering the growing interdependence between the internal and external (European) business environment, the results are highly significant for handling the interest and exchange rates in sustaining economic growth.

Sustainable Economic Growth Based on R&D Amplification and Technological Content of Exports. Evidences from Romania and The V4 Economies

A vast body of literature recognizes the importance of exports as a driver of economic growth. The increasing share of more sophisticated exports gave birth to the idea that the composition of exports, and not just exports per se, could be crucial for economic dynamics. The aim of this paper was to estimate the relative importance of exports with different technological content on economic growth in Romania and V4 economies, considering R&D (Research and Development) expenditure as a predictor of the pattern of these exports. We used a panel analysis on a data set covering the period of 1995–2017 for Romania and V4 economies. The overall results outline significant differences among selected countries in terms of how the composition of exports influenced economic growth in selected countries. In addition, significant differences were found among selected countries in how R&D expenditure influenced the composition of exports. This paper has clearly shown that the composition of exports has different effects on economic growth in selected countries, mostly explainable by country-specific factors. At the same time, the R&D activity, as the main input in the innovation process, can determine the pattern of the structure of exports. The conclusions of such research could become useful tools in shaping macroeconomic policies focused on sustained growth and long-term economic development, especially in countries concerned about improving their status in the global value chain.

"Forecasting the Economic Growth in Romania with the Cobb–Douglas Production Function"

"Forecasting the Economic Growth in Romania with the Cobb–Douglas Production Function"

Wage Growth Implications in Romania

Economy-wide real wage growth in Romania has been accelerating since 2015. While wages in Romania are low relative to the rest of the EU and they are expected to continue growing faster than the EU average as the economy catches up, wage growth in excess of productivity gains could lead to losses in competitiveness. Overall, the increase in real compensation per employee was broadly in line with that of labour productivity between 2011 and 2016. Already in 2016, however, real compensation started to race ahead and in 2017 unit labour costs expanded by more than 11%. While Romania's exports have fared well in recent years, the current account deficit has been gradually increasing since 2014 as imports accelerated in line with booming private consumption, itself stimulated by a persistently pro-cyclical fiscal policy. Thus, a deteriorating external competitiveness and export performance due to rising production costs could pose significant macroeconomic risks. Against this background, this paper seeks to investigate the role of public sector wages in leading wage changes in the economy as a whole, which in turn might influence Romania's cost competitiveness.