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Investigating Fdi Inflows In Romania Through An Arma Model

Author

Listed:
  • Oana - Cristina POPOVICI

    (Institute for Economic Forecasting)

  • Adrian Cantemir CALIN

    (Institute for Economic Forecasting)

  • Mihaela SIMIONESCU

    (Institute for Economic Forecasting)

Abstract

In this paper, we study the relationship between GDP and FDI in Romania and we also assess the importance of GDP level for further attracting FDI. Using an ARMA model, we find that FDI in Romania is not explained by the value in the previous period, but is due to the evolution of the errors in the previous period. In the range 1990-2013 we obtain a valid relationship between FDI and real GDP growth. According to the variance decomposition of FDI, we can conclude that 1.06% of the variation of FDI is explained by the changes in real GDP rate in the first period. Then, the influence of GDP rate decreases in time, the variance of FDI explained by GDP rate having a value close to zero in the 10th lag.

Suggested Citation

  • Oana - Cristina POPOVICI & Adrian Cantemir CALIN & Mihaela SIMIONESCU, 2014. "Investigating Fdi Inflows In Romania Through An Arma Model," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 35(1), pages 55-72, September.
    • Handle: RePEc:ath:journl:v:35:y:2014:i:1:p:55-72
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    Citations

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    Cited by:

    1. Raluca-Elena Hurduzeu, 2015. "Culture And Leadership: The Case Of Romania," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(56), pages 119-134, June,.
    2. Vasile Alecsandru STRAT & Oana Cristina POPOVICI, 2015. "FDI Convergence versus Real and Structural Convergence at the EU Level. An Approach Based on the GINI Coefficient," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 18(1), pages 150-162, June.
    3. Vasile Alecsandru STRAT, 2015. "The relationship between the education system and the inflows of FDI for the Central and East European EU new member states," Romanian Journal of Economics, Institute of National Economy, vol. 41(2(50)), pages 76-92, december.

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