4.2.1.1 Dependent Variables

The dependent variables, or outcome variables to be used for our statistical analysis are the following. The outcome variables are derived from observations  made during chapter 3.3.9  and chapter 3.5. So please refer to the respective chapters to see why they have been chosen as dependent variables for the statistical test.

GDP  per capita

Yi – GDP per capita – differs sizable in Romania what is best obvious on county level. Neither the extent nor the regional pattern changed significantly  during the past years, making it virtually indifferent which’s year per capita GDP  is chosen as dependent variable. Nevertheless, the year 2005 is the last one  with available data on county level and might show the pattern of regional  disparities in Romania in income more clearly as most subsidies where removed then and all  counties had some five years of positive growth in which they could exhibit  their potential.

FDI-Activity

FDI – FDIi – is captured via the number of firms with foreign participation per  capita. This is because exact monetary FDI-flows on county level are missing  and data on subscribed foreign capital per county is distorted by large-scale enterprises  in otherwise less attractive counties. These large-scale investments, most  probably due to privatization of heavy industries and the energy sector are typically  not accompanied by higher per capita GDP, nor do they draw too many other  investors into the region. On the other hand, several counties attracted a huge  bunch of foreign owned SMEs, which seem to be very productive on the aggregate  level, though relatively little capital is at stake. The regions with higher FDI-activity  tend to feature also a higher per capita GDP, profit from FDI-spillovers to  domestic firms (a rarer phenomenon among the CEECs) and have been continuously  the same counties (cf. chapter 3.5 for detailed information and reasoning). Thus,  FDIi considers  all registered firms with foreign participation registered between 1991 and  2007, adjusted for county-population size.

Total  Economic Activity

Entirely analogous, total economic activity (TEAi) is  captured by the total number of firms per capita, registered between 1990 and  2007.  Just like FDI-activity, total  economic activity is unevenly distributed among the counties and correlates  highly but not entirely with FDI-activity. Foreign firms seem to be somewhat  more pretentious as FDI-activity appears as a progressive ascending function of  domestic economic activity in the plots.