3.5 FDI Inflows
Romania’s Foreign Direct Investment -performance was low for a long time when compared to other CEECs. Noteworthy FDI-inflows in Romania started only after the new wave of privatizations (cf. chapter 3.2.1.4) in 1997 but soon decelerated again until 2002. But Romania could join the other three front-runners in absolute terms afterwards.
Though Romania caught-up in recent years, there still seems to be much room for further FDI-inflows both in absolute and relative terms when compared to other CEECs. Per capita FDI in 2006 amounted to some 528 US-$, what represents a big improvement but was still only undercut by Poland and (503 US-$) and Slovenia (275 US-$). Hungary attracted even 1,028 US-$ of FDI per capita.
Concerning regions, FDI is unevenly distributed in Romania (cf. also chapter 3.3). The BNR provides some data for the Romanian development regions (NUTS-II level) for the years 2003 – 2006. Greenfield data is available for the years 2005 and 2006.
| Table 3.1: FDI Stock by Development Regions | ||||
| Region / Year |
2003 |
2004 |
2005 |
2006 |
| Total (MIO EUR) |
9,662 |
15,040 |
21,885 |
34,512 |
| Bucuresti-Ilfov |
54.20% |
56.00% |
60.60% |
64.30% |
| Sud-Est |
10.80% |
11.60% |
8.40% |
7.70% |
| Centru |
6.50% |
6.90% |
7.40% |
7.40% |
| Sud |
8.20% |
8.50% |
6.30% |
6.50% |
| Vest |
7.70% |
7.30% |
6.80% |
5.60% |
| Nord-Vest |
6.70% |
6.90% |
5.80% |
4.60% |
| Sud-Vest |
3.70% |
2.70% |
3.40% |
2.70% |
| Nord-Est |
2.20% |
0.10% |
1.30% |
1.20% |
| Σ |
100.00% |
100.00% |
100.00% |
100.00% |
| Source: BNR 2008, own calculations, own table [1] | ||||
The share of Greenfield investments among the total FDI-stock amounted to some 42.21 % in 2005 and to 49.46 % by 2006. The highest share of total Greenfield FDI-stocks in 2006 was recorded in the Region Bucharest-Ilfov, followed by Center (9.57 %), the West (7.96 %), North-West (5.96 %) and maybe the South (5.2 %) which caught-up compared to the previous year (3.97 %). Comparable data on county level is missing to my knowledge.
On the other hand, as already observed by Kaminski & Ng (2004) and World Bank (2004), focusing at monetary data alone can be misleading in the Romanian case. Both studies observed an extraordinary economic activity with regard to the number of firms, which was not suggested by the amount of monetary FDI-inflows (cf. chapter 3.2.2.3). This way, Romania managed to achieve an unexpected high export performance and to become one of the few CEECs where significant spillovers could be detected. This development was to a large extent driven by the large number of relatively small firms.
Footnotes
[1] Data for Slovakia was missing for 2001 and 2004 –2006. Accordingly, Slovakia was only considered for share calculation in the years with available data. As Figure 3‑29 indicates FDI-inflows vary notably in all CEECs over the covered period. Hence, Slovakia was not considered for average building (Figure 3‑30) as especially years with higher inflows are missing. Thus, an average value would probably underestimate Slovakia’s performance.