An Analysis Of Trade Balance And Main Activities Of Romanian Subsidiaries Of Transnational Companies During The Period 2014-2022

Foreign direct investment (FDI) is to an increasing extent given credit for the economic development of a country along with the creation of new jobs, foreign capital, technology and knowledge transfer, generating positive spillover effects or the opportunity of joining global value chains. In the current paper the authors aim to investigate the impact of the subsidiaries of transnational companies (TNCs) which operate in Romania and carry out foreign trade activities on the trade balance of Romania during the period 2014-2022. The analysis demonstrates they generate a significant surplus in the case of services and a deficit in the case of goods, the surplus surpassing the deficit until 2018. Beginning with 2019, the high growth rate of deficits can no longer be balanced through a slower growth rate of surpluses resulting from the trade in services. Other findings reveal the sectors contributing the most to these imbalances: the manufacturing industry, telecommunications and information technology, manufacturing services and transportation generate a large surplus and trade generates a huge deficit. Data was extracted from BNR FDI annual reports, issued during 2013-2022, based on Combined Nomenclature and the IMF’s Balance of Payments and International Investment Position Manual, 6th edition (BPM6) methodology. The research might be extended with the identification and evolution of TNCs at the microeconomic level, and subsequently studying the case of key multinational companies.