THE IMPACT OF FOREIGN DIRECT INVESTMENT OVER ROMANIA'S EXPORTS

Abstract

The analyses concerned with the relationship between FDI – host country focus on its impact on the entire economy or only on trade in general, as well as on their subcomponents. Our approach focuses on the link between FDI – host country's exports, as a result of Romania's current situation, in which exports are clearly and strongly influenced by FDI. To confirm our results we used various econometric models from the statistical apparatus, applying and adapting the good practice recommended by OECD. The studies that highlight how foreign capital is involved in export activity gradually discovered a link between these two factors. The low level of FDI in the early 1990s and the original orientation of many MNCs towards domestic demand contributed to the gradual disclosure, in the scientific literature, of the effects of FDI on exports. The undertaken regression analysis cemented and, in the same time, diversified previous results, coming with more information about the effects exerted by FDI. The results and their interpretation must be viewed from the perspective of the limitations imposed by certain mathematical functions in the process of determining aspects of economic behaviour.