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The Contribution Of Foreign Direct Investment To The Development Of Romania'S Trade In Services

Author

Listed:
  • GEORGETA ILIE

    (Institute for World Economy, Romanian Academy)

Abstract

During the last three decades, foreign direct investment (FDI) inflows have made an important contribution to the Romanian economic transformation. The recognition of their positive impact on the economic development has been sustained by favourable national investment policies, while the investing companies have been attracted by the Romanian market advantages. The paper highlights that the service sector in Romania experienced the most important growth, one of its determinant factors being the FDI it benefited from, so that this sector came to have a considerable support to the added value in GDP, employment and total foreign trade. The main objective of the paper is to emphasize the contribution of FDI to supporting Romania's trade in services, developed in a quantitative analysis focused on the evolution of indicators regarding FDI in services and service exports of foreign companies investing in Romania. This investigation is doubled by a qualitative search of the factors that have attracted FDI in the service industries and also the FDI effects particularly on the information and communication technology, professional, financial, telecommunications and trade services. The final remarks in the last part of this paper underline the dependence of the service sector of Romania on FDI, this relationship continuing to bring many benefits to the Romanian trade in services and thus sustaining GDP and employment and also enabling access to new technologies in services, but at the same time exposing the service sector to some potential vulnerabilities.

Suggested Citation

  • Georgeta Ilie, 2024. "The Contribution Of Foreign Direct Investment To The Development Of Romania'S Trade In Services," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 12(2), pages 60-72, December.
    • Handle: RePEc:ntu:ntugeo:vol12-iss2-60-72
    as

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    References listed on IDEAS

    as
    1. Syed Hasanat Shah & Syed Ali Raza, 2022. "The Impact of Services FDI on Services Exports in NICs," Economic Papers, The Economic Society of Australia, vol. 41(2), pages 176-181, June.
    2. Johnson Adelakun & Kanayo Ogujiuba, 2023. "A Comparative Analysis of the Determinants of Foreign Direct Investment: The Case of Top Ten Recipients of Foreign Direct Investment in Africa," Economies, MDPI, vol. 11(10), pages 1-14, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    foreign direct investment; services; trade in services; Romania; economic development;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • L8 - Industrial Organization - - Industry Studies: Services

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