A Classic Model of Foreign Direct Investment (FDI), Parameterized and Validated, Similar for Romania and Bulgaria

A brief introduction summarizes the main classic foreign direct investment (FDI) theories, an dis followed by a review of the latest theoretical trends from the literature over the last decade. A brief yet absolutely necessary methodological section is followed by the presentation of an econometric model of classical FDI, specified, parameterized and validated in the case of Romania, and then a similar one for Bulgaria. This is the theme that involves discussions about the almost identical vision that investors have about Romania and Bulgaria, starting from the decision to invest in the economies of these two countries. At the same time, the article attempts a staged presentation of, while redefining, one of the author’s broader projects, described theoretically more extensively, and practically more narrowly, in an article published in this journal (RRS Supplement, 8/2017), which was devoted to a model based on relative international indicators with investor-oriented signalling power (focusing on risk-rating dynamics, corruption and economic freedom indexes). The classic approach of the new type of modelling has factors represented by exclusively value indicators, from loans from commercial banks and other sources, GDP value, gross fixed capital formation (GFCF), imports (M) and exports (X). A few final remarks clarify the prospects of this modeling oriented towards a number of interesting situations generated by the invalidation of other classical models in other ex-socialist economies.