Advanced Search
MyIDEAS: Login

A VAR Analysis of FDI and Wages: The Romania's Case

Contents:

Author Info

  • Mihai Ioan Mutascu

    ()
    (West University of Timisoara, Faculty of Economics and Business Administration, Pestalozzi Johan Heinrich 16, Timisoara, 300115, Jud. Timis, Romania)

  • Anne-Marie Fleischer

    ()
    (West University of Timisoara, Faculty of Economics and Business Administration, Pestalozzi Johan Heinrich 16, Timisoara, 300115, Jud. Timis, Romania)

Abstract

According to Lall (1997), the FDI are strongly interconnected with a series of variables, such as: economic conditions (markets, natural resources, competitiveness), host country policies (macro policies, private sector, trade and industry, FDI policies), as well as MNE strategy (risk perception, location, sourcing of products/inputs, integration transfer). Recent studies have shown that the relationship ‘FDI-Wages’ is significant and the two variables have one on one influence. More precisely, the low wages have the role to attract FDI and the high volume of FDI generates the increase of the wages on the destination’s country labor market. Also, the FDI augmentations determine inequalities on the structure of the wages. The paper analyses the ‘behavior’ of the relationships between the volume of FDI and the level of wages, in Romania, using an unrestricted vector autoregressive model (Unrestricted VAR). Based on the impulse functions generated by the model, some principal conclusions have resulted: (1) The impact of the FDI on the wages is not uniform during the year, depending usually on the FDI flow and also on the self-regulation way and reaction of the wages on the labor market; (2) The impact of the wages on the FDI is temporally sinuous in short term. In this situation, the FDI flow does not depend entirely on the signals received by investors regarding the level of wages in the destination country.

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://www.ijesar.org/docs/volume3_issue2/var_analysis.pdf
Download Restriction: no

File URL: http://www.ijesar.org/volume3_issue2.php
Download Restriction: no

Bibliographic Info

Article provided by Technological Educational Institute (TEI) of Kavala, Greece in its journal International Journal of Economic Sciences and Applied Research (IJESAR).

Volume (Year): 3 (2010)
Issue (Month): 2 (December)
Pages: 41-56

as in new window
Handle: RePEc:tei:journl:v:3:y:2010:i:2:p:41-56

Contact details of provider:
Web page: http://www.ijesar.org/
More information through EDIRC

Related research

Keywords: FDI; Wages; VAR; Analysis; Impulse function; Effects;

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:tei:journl:v:3:y:2010:i:2:p:41-56. 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: (Kostas Stergidis).

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.