Globalisation, Trade Openness and Foreign Direct Investment in Romania

Dima, Stela

doi:10.1515/sues-2016-0018

Abstract

The paper analyses the trend of globalisation, trade openness and foreign direct investments (FDI) in Romania and the link between them in the last 25 years. Data from UNCTAD, World Bank and KOF globalisation index were used in econometrical models testing the link between globalisation, trade openness and foreign direct investment. A strong positive and statistical validated link is found between globalisation and FDI, between trade openness and FDI, and between FDI and globalisation. In the context of Romanian economy, these three phenomena are interrelated and each of them is acting to potentiate the effect of the other. Moreover, a multivariate regression analysis emphasized the dependency between globalisation index and foreign direct investment, trade openness and market capitalisation. These results can be taken into account when national policies aiming to attract FDI and stimulating export-import activities are designed.

References

1. Adams, S.(2008).Globalization and income inequality: Implications for intellectual property rights. Journal of Policy Modeling, 30(5), pp.725-735.10.1016/j.jpolmod.2007.10.005
Search in Google Scholar Back to article
2. Aizenmann, J. and Noy, I.(2006). FDI and trade-Two-way linkages?.The Quartely Review of Economics and Finance, 46(3), pp.317-337.10.1016/j.qref.2006.02.004
Search in Google Scholar Back to article
3. Almfraji, M.A., Almsafir, M.K. and Yao, L.(2014). Economic Growth and Foreign Direct Investment Inflows: The Case of Qatar. Procedia-Social and Behavioral Sciences, 109, pp.1040- 1045.10.1016/j.sbspro.2013.12.586
Search in Google Scholar Back to article
4. Almsafir, M.K., Nor Shaari, M. and Al-Shibami Ahmed, H. (2011). Locational Related Determinants of Foreign Direct Investment in Yemen: Dunning’s Eclectic Paradigm Perspective. Australian Journal of Basic and Applied Sciences, 5(8), pp.394-404.
Search in Google Scholar Back to article
5. Al-Shawaf, A.M.K. & Almsafir, M. K. (2016).Economic globalization: role of inward and outward FDI with economic growth-Evidence from Malaysia.Journal of Business and Retail Management Research, Vol.10 Issue 2, pp.64-74.
Search in Google Scholar Back to article
6. Bari, I. (2005). Globalizarea economiei, Bucuresti: Editura Economica.
Search in Google Scholar Back to article
7. Catana, A. (2011).Multinational Corporations and Foreign Direct Investments in Romania. Effects on the Romanian Trade. The Annals of the University of Oradea, Economic Sciences, Issue 2, pp. 148-156.
Search in Google Scholar Back to article
8. Dreher, A. (2006). Does Globalization Affect Growth? Empirical Evidence from a new Index Globalization. Applied Economics, 38 (10), pp.1091-1110.10.1080/00036840500392078
Search in Google Scholar Back to article
9. Dreher, A., Gaston, N., Martens, P. (2008). Measuring Globalization-Gauging its Consequence. New York: Springer.
Search in Google Scholar Back to article
10. Fadhil, M.A. and Almsafir, M.K.(2015). The Role of FDI Inflows in Economic Growth in Malaysia (Time Series: 1975-2010). Procedia Economics and Finance, 23, pp.1558-1566.10.1016/S2212-5671(15)00498-0
Search in Google Scholar Back to article
11. Farshid, P. Ali, S. and Gholamhosein, S. (2009). The impact of foreign direct investment and trade on economic growth-Taking China, Korea, Malaysia, Philippines & Thailand for example. China-USA Business Review, 8(12), pp.37-43.
Search in Google Scholar Back to article
12. Hailu, Z.A. (2010). Impact of Foreign Direct Investment on Trade of African Countries. International Journal of Economics and Finance, 2(3), p.p122-133.10.5539/ijef.v2n3p122
Search in Google Scholar Back to article
13. Heimann, B. (2003). Tax incentives for Foreign Direct Investment in the Tax Systems of Poland, the Netherlands, Belgium and France. Available at: http://www.iwim.unibremen.de/publikationen/pdf/b074.pdf Accessed 30 June 2016.
Search in Google Scholar Back to article
14. Huidumac-Petrescu, C.; Joja, R.M.; Hurduzeu, Gh.; Vlad, L.B. (2011). Foreign Direct Investments Expansion - Essential Globalization Factor. Theoretical and Applied Economics, Volume XVIII, No. 1 (554), pp. 163-172.
Search in Google Scholar Back to article
15. Isac, C.; Dura, C.; Ciurlau, F.C. (2011). The expansion of FDI flows-a major factor of globalization. Annals of University of Petrosani, Economics 11(4), pp.139-150.
Search in Google Scholar Back to article
16. Kahai, S.K. &Simmons, W. (2005).The impact of Globalization on income inequity. Global Business and Economics Review, Vol.7, No.1, pp.1-15.
Search in Google Scholar Back to article
17. KOF, Index of Globalization. Available at http://globalization.kof.ethz.ch/ Accessed 30 June 2016.
Search in Google Scholar Back to article
18. Kornecki, L. & Rhoades, D. (2007). How FDI facilitates the globalisation process and stimulates economic growth in CEE. Journal of International Business Reserch, Vol.6, No.1, pp.113-126.
Search in Google Scholar Back to article
19. Méon, P.G. and Sekkat, K.(2007). Revisiting the relationship between governance and foreign direct investment. Brussels Economic Review, 50(1), pp.41-61.
Search in Google Scholar Back to article
20. Moghaddam, A.A. and Redzuan, M.R. (2012). Globalization and Economic Growth: A Case Study in A Few Developing Countries (1980-2010). Research in World Economy, 3(1), p.p54-62.10.5430/rwe.v3n1p54
Search in Google Scholar Back to article
21. Murariu, I.A. (2011) Cauzele si implicatiile procesului globalizarii economiei mondiale. Studia Universitatis ”Vasile Goldis” Economic Series, Anul 21 Partea a 2-a, pp.329-333.
Search in Google Scholar Back to article
22. Mutascu, M. and Fleischer, A.-M. (2011). Economic Growth and Globalization in Romania.World Applied Sciences Journal, 12 (10), pp.1691-1697.
Search in Google Scholar Back to article
23. Neagu, O. (2014). How much does globalisation affect the income inequality in Romania?. Studia Universitatis”Vasile Goldis” Arad, Economics Series, Vol. 24, Issue 4, pp.76-83.
Search in Google Scholar Back to article
24. Pradhan, R.P.(2010). Trade Openness and Foreign Direct Investment in India: The Globalization Experience. IUP Journal of Applied Finance, 16(3), p.26-43.
Search in Google Scholar Back to article