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Risk And Foreign Direct Investment In Romania

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  • Catalin Drob

Abstract

This paper tries to present the main categories (types) of risks that affect the inflows of foreign direct investment (FDI) in Romania, such as: country risk, political risk, economic risks, sovereign risks and so on. FDI is an important factor contributing to the economic development and to the economic growth of a country. In order to recuperate its economic handicap as compared to the other countries in the EU, Romania needs a massive inflow of foreign capital, especially in the form of direct investment. The paper also presents the evolution of FDI inflows in Romania and how they were influenced by the main factors affecting the FDI. In principle, between risk and the level of FDI inflows there is a direct dependency relationship: the higher the risk is in a country, the lower the level of FDI inflows is in that country. This is demonstrated by the empirical studies regarding FDI. These studies show that countries with high risk have major difficulties in attracting foreign investment. Therefore, it is important to identify very precisely the main risks that may affect the level of FDI inflows in Romania, in order to propose and implement strategies to mitigate these risks and to attract more foreign direct investment in Romania.

Suggested Citation

  • Catalin Drob, 2014. "Risk And Foreign Direct Investment In Romania," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 19.
    • Handle: RePEc:bac:fsecub:14-19-16
    as

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    File URL: http://sceco.ub.ro/DATABASE/repec/pdf/2014/20141916.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    economic development; risks; crisis; foreign direct investment; economic growth; Romania;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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