Accession of Romania in the European Union. FDI determinants analysis

Abstract

This paper analyzes relevant determinants for foreign direct investment inflows in Romania, recent member of the European Union using an econometric approach taking into account the previous literature in this field. The aim is to see whether some variables considered relevant for FDI are significant focusing on the corruption problem of this country using the Corruption Perception Index as a proxy for this. The main literature confirms negative relationship between corruption and FDI in accordance with our results but only when considering a model based on corruption. Our findings give relevance to the membership in the EU as important factor for FDI inflows in Romania. The necessary data for the parametrization on models is obtained from Eurostat database and World Integrated Trade Solution.