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Foreign Trade and FDI as Main Factors of Growth in the EU

Author

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  • Albu, Lucian Liviu

    (Institute for Economic Forecasting, Romanian Academy.)

Abstract

In the last decade, a number of empirical studies tried to highlight a strong correlation among foreign trade, foreign direct investment and economic growth. Moreover, the recent crisis affecting firstly the GDP growth had also a negative impact on foreign trade and on FDI inflow. Today, there is a strong competition both on the goods market and on the capital market. As a rule, in countries where the stock of FDI is high, the foreign trade is in expansion and has a high level of efficiency and, consequently, a relatively stable economic growth is demonstrated. Based on available statistical data, we estimated a model to simulate the impact of FDI on GDP growth in the EU. Further, a similar approach permitted us to investigate the FDIExport- GDP relationship in the case of Romania for the last decade. As a conclusion, to recover economic growth a growth in FDI is needed, taking into account its major impact on the efficiency of foreign trade and its contribution to the general economic growth.

Suggested Citation

  • Albu, Lucian Liviu, 2013. "Foreign Trade and FDI as Main Factors of Growth in the EU," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 7-17, June.
    • Handle: RePEc:rjr:romjef:v::y:2013:i:2:p:7-17
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    References listed on IDEAS

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    Cited by:

    1. SIMIONESCU, Mihaela, 2015. "Modelling And Predicting The Indirect Taxes In Romania," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 19(2), pages 67-77.
    2. Florentina Viorica GHEORGHE, 2016. "External trade – key element of national economy evolution under sustainable development circumstances," Eco-Economics Review, Ecological University of Bucharest, Economics Faculty and Ecology and Environmental Protection Faculty, vol. 2(1), pages 3-17, June.
    3. Gheorghiţă DINCĂ & Marius Sorin DINCĂ, 2015. "Public Debt and Economic Growth in the EU Post-Communist Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 119-132, June.
    4. Ion Panescu & Nicoleta-Elena Cristea, 2024. "An Analysis Of Trade Balance And Main Activities Of Romanian Subsidiaries Of Transnational Companies During The Period 2014-2022," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 169-178, April.
    5. Maria-Ramona Sârbu & Lenuta Carp (Ceka), 2015. "The Impact of Foreign Direct Investment on Economic Growth: The Case of Romania," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(4), pages 127-137, August.
    6. Gheorghe Zaman & Zizi Goschin, 2016. "Regional Patterns Of Romanian Foreign Trade In The Aftermath Of The Economic Crisis," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 230-239, July.
    7. Bojnec, Štefan & Ferto, Imre, 2014. "Outward Foreign Direct Iinvestments and Merchandise Exports: The European OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 87-99, June.
    8. Alina Mihaela Ciobanu, 2021. "The Impact of FDI on Economic Growth in Case of Romania," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(12), pages 1-81, December.
    9. KARGI, Bilal, 2014. "Portfolio in Turkish Economy, and A Long Termed Relation Between Foreign Direct Investments and The Growth, and The Structural Breakage Analysis (1980-2012)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1), pages 70-81.
    10. Maria-Anca CRAIU, 2019. "The Dynamics Of Trade At The European Union Level. Case Study – United Kingdom," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 18(1), pages 31-42.
    11. Elisabeta Jaba & Ioan-Bogdan Robu & Costel Istrate & Christiana Brigitte Balan & Mihai Roman, 2016. "Statistical Assessment of the Value Relevance of Financial Information Reported by Romanian Listed Companies," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 27-42, June.
    12. Błażejowski, Marcin & Gazda, Jakub & Kwiatkowski, Jacek, 2016. "Bayesian Model Averaging in the Studies on Economic Growth in the EU Regions – Application of the gretl BMA package," MPRA Paper 89366, University Library of Munich, Germany, revised Oct 2016.
    13. Liliana Scutaru, 2015. "The Structure And Territorial Dynamic Of Foreign Direct Investment In Romania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 185-190, February.
    14. Gheorghe Zaman & Florentina-Viorica Gheorghe & Artur-Emilian Simion, 2016. "Some Characteristics Of Romania’S External Trade In The Period 1990-2014," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 207-229, July.
    15. Amina Shahid & Hafiz Muhammad Abubakar Siddique & Rabia Liaqat, 2019. "Human Health and Foreign Direct Investment Nexus: Evidence from South Asia," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(3), pages 209-218, September.

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    More about this item

    Keywords

    FDI; export; economic growth; spatial distribution; convergence;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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