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Foreign and Public Investment and Economic Growth: The Case of Romania

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  • Stanciu, Cristian Valeriu
  • Mitu, Narcis Eduard

Abstract

In the last decades, there were many empirical studies regarding the role of private and public investment in the growth process. The aim of this paper is to examine, in the Romanian economy, the relationship among 5 macroeconomic variables: Gross Domestic Product, Foreign Direct Investment, Foreign Portfolio Investment, Foreign Other Investment and State Public Investment, using quarterly data over the period 2006Q1-2016Q2. A multiple regression model is used to investigate the effects of the selected independent variables (FDI, FPOI, FOI and SPI) on the endogenous variable (GDP). The results obtain from the multiple regression model show a positive relationship between Gross Domestic Product and Foreign Direct Investment, State Public Investment and Foreign Portfolio Investment (in this order) and a negative relationship between Gross Domestic Product and Foreign Other Investment. We hope that this paper can be a useful tool for government and policy makers in formulating the right investment policies in order to enhance economic development.

Suggested Citation

  • Stanciu, Cristian Valeriu & Mitu, Narcis Eduard, 2017. "Foreign and Public Investment and Economic Growth: The Case of Romania," MPRA Paper 84789, University Library of Munich, Germany, revised 2017.
    • Handle: RePEc:pra:mprapa:84789
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    File URL: https://mpra.ub.uni-muenchen.de/84789/1/MPRA_paper_84789.pdf
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    References listed on IDEAS

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    5. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
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    Cited by:

    1. Daniela PIRVU & Claudia STANCIU-TOLEA, 2019. "Public Investment Challenges And Reforms In Romania," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 18(3), pages 47-53.

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    More about this item

    Keywords

    Foreign Investment; Public Investment; Romania;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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