Popescu Liviu (liviu.popescu@edu.ucv.ro; liviunew@yahoo.com)
University of Craiova, Faculty of Economics and Business Administration, Department of Statistics and Economic Informatics
Brostescu Simina (simina_brostescu@yahoo.com)
University of Craiova, Faculty of Economics and Business Administration, Department of Statistics and Economic Informatics
Abstract
In this paper, a statistical research was done on the stock of foreign direct investments in the period 1995-2018 for Bulgaria and Romania. Several valid econometric models have been found that explain the determinants influencing the evolution of the stock of FDI inputs in the two countries. The stock of of foreign direct investments was used as a dependent variable, calculated as a percentage of gross domestic product, and as an independent variables, indicators of international trade, economic trends and components of the signaling indicator given by economic freedom indices. It was found that in the case of Bulgaria, the increase in exports, imports, trade balance and balance of payments lead to an increase in the stock of FDI. Also, a higher score of the components of economic freedom, which is characterized by a business environment as free as possible, by a level of taxation as low as possible, as well as by a diminished degree of corruption, lead to an increase in the stock of FDI inputs in the Bulgarian economy. In the case of Romania, it turned out that exports, trade balance, balance of payments have a positive influence on the stock of FDI, as well as a low level of taxation, both in the case of personal income and corporations, lead to growth stock of FDI. Contrary to Bulgaria, an increase in imports leads to a decrease in the stock of FDI in Romania. Finally, it is found that the indices of diversification of imports negatively influence the stock of FDI in both countries, which means that a greater divergence of imports from the world model leads to a decrease in the stock of FDI.
Keywords: foreign direct investment stock, multiple linear regression, economic freedom index, international trade, quantitative methods.
JEL classification: C12, C52, O24
