Foreign Direct Investment in Romania

• Author: Constantin S.
• Position: Transilvania University of Brasov
• Pages: 193-198

Bulletin of the Transilvania University of Braşo v

Series V: Economic Sciences • Vol. 11 (60) No. 2 – 2018

FOREIGN DIRECT INVESTMENT IN ROMANIA

Sanda CONSTANTIN1

Abstract: The paper presents an analyse of foreign direct investments in

Romania. There were taken into consideration a few indicators in order to

determine the evolution of chosen indicators and the impact of foreign direct

investment in local economy. The chosen indicators refer to foreign direct

investment balance, turnover, average number of employees and exports. All

these indicators were analysed for a period of eight years, during 2009 and

2016. There were also presented the most important countries which

developed foreign direct investments in our country. In the end it was

observed the fact that a lot of those investments are new investment

(greenfield), and also the impact of exports over the trade balance.

Key words: investment, turnover, exports

1. Introduction

According to UNCTAD in Handbook of Statistics 2017, foreign direct investments (FDI)

is defined as an investment reflecting a lasting interest and control in one economy, in

an enterprise resident in another economy (foreign affiliate). FDI inflows comprise

capital provided by a foreign direct investor to a foreign affiliate, or capital received by a

foreign direct investor from a foreign affiliate.

The benefits of FDI are important for both sides involved.

For the incoming economy we observe the increase of work places which positively

affect the living standard. Also, the state budget receives much more money from

companies’ taxes meaning the increase of GDP.

In the same time the foreign companies bring new knowle dges, a performant

management and their own organizing methods. All of these and, of course the new

technologies means the increase of productivity.

A lot of multinational companies implement some co ntinuous learning processes.

Thus, the employees improve their abilities, get new skills which improve their activity

with a positive effect over productivity also.

For the foreign companies the benefits refer to low costs, the possibility of using local

raw materials, labour force well trained. All of those mean the increasing of the

company’s profit.

1 Transilvania University of Braşov, sanda.constantin@unitbv.ro