Determinants Of Economic Development In Romania: A Multidimensional Approach

Over recent decades, humanity has increasingly begun to understand the importance of ensuring better subsistence for all current and future generations by pursuing economic prosperity within a pristine planet and a world governed by peace and partnerships between nations. Accordingly, through our research, we aim to assess the manner in which a series of economic, social, and environmental factors influence economic development in Romania between 2000 and 2024 (i.e., time-series data). To measure the notion of economic development, we used one of the most popular proxy variables, namely, real gross domestic product (GDP) per inhabitant. For the econometric analysis, we employ the Ordinary Least Squares (OLS) method with Newey-West standard errors. Our findings highlight that GDP per capita is positively influenced by the employed population, R&D spending, population’s access to safely managed drinking water, and municipal waste recycling. Conversely, it is negatively influenced by people living in poverty, young people who are neither in education nor employed, inflation, and greenhouse gas emissions. Furthermore, we state that our econometric estimates are robust, not changing significantly when an alternative proxy dependent variable is introduced (i.e., the Human Development Index). Finally, we conclude that our results are consistent with those obtained by various scholars who have addressed the topic of economic development in Romania and internationally.