Advanced Search
MyIDEAS: Login

The Romanian External Trade And The Foreign Direct Investments Inflows After 2007. A Critical Survey

Contents:

Author Info

  • Giurgiu Adriana

    ()
    (University of Oradea, Faculty of Economic Sciences)

Abstract

Focusing more on the evolution of the Romanian external trade and FDI inflows after 2007 - the year of Romania's EU integration - the paper provides insights in the trade and FDI inflows determinants in the context of the convergence process and also in relation to the financial global crisis. As the statistic data envisage, Romanian exports and imports were high over the period 2000-2010, and there were also large FDI inflows in the economy, mostly until 2008. Although the data appear to be encouraging, it seems that Romania did not succeed to maximize the benefits which should result from such a situation. Moreover, the situation after 2008 shows that Romania is in a deep recession accelerated and maintained by uninspired government policy measures with a strong negative impact on the Romanian economy. The aim of this paper is to empirically investigate Romanian export and import demand functions after the year 2007, and to compare them with those of the period 2000-2006, using quarterly data, in correlation with the FDI inflows. The main contribution of the paper is that it is an empirical analysis on Romania's FDI and external trade, providing the impact of the main determinants of export and import of Romania, by using the Engle-Granger two step method. Following Allard (2009) rather than just providing the elasticity, this method combines the elasticity with the evolution of the explanatory variables to quantify their impact during the analysed period. The analysis aim to cover all possible factors underlying the external sector performance of Romania and thus, they are complemented with country specific analysis. The empirical analysis will therefore provide some interesting insights not only in the context of the convergence process of the country with the Eurozone but also in relation to the exchange rate regime. The theoretical framework relies on the "imperfect substitutes" model (Goldstein and Khan; 1985), and it is used in the paper to estimate the demand functions of the Romanian exports. Furthermore, the effect of the FDI on export performance is also investigated. The conclusion which came out was, on one side that the export growth in Romania since 2007 is mainly due to strong FDI inflows since 2000, while the real exchange rate appreciation seems to not have significant impact on export developments of the country. On the other side, the significant imports growth was due to strong reduction in productivity and in the gross capital formation rate, which combined with the lack of domestic capital, have largely affected the private sector, and mainly the manufacturing one, on which the Romanian economy should rely on, mainly due to its competitiveness.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://anale.steconomiceuoradea.ro/volume/2011/n2/121.pdf
Download Restriction: no

Bibliographic Info

Article provided by University of Oradea, Faculty of Economics in its journal The Annals of the University of Oradea. Economic Sciences.

Volume (Year): 1 (2011)
Issue (Month): 2 (December)
Pages: 835-841

as in new window
Handle: RePEc:ora:journl:v:1:y:2011:i:2:p:835-841

Contact details of provider:
Postal: Universitatii str. 1, Office F209, 410087 Oradea, Bihor
Phone: +40259408799
Fax: 004 0259 408409
Email:
Web page: http://anale.steconomiceuoradea.ro/
More information through EDIRC

Related research

Keywords: external trade; FDI inflows; exports; imports; Romania's economy;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2011:i:2:p:835-841. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catalin ZMOLE).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.