Foreign Direct Investments in Romania: Between Lost Opportunities and Regional Challenges
Foreign Direct Investments in Romania: Between Lost Opportunities and Regional Challenges

Summary/Abstract: Romania’s position in the Central and South-East European region is not necessarily a comfortable one from the FDI perspective. As a late player in relation to inward FDI flows, marked by political and legal instability and a lack of a coherent strategy for attracting FDI, Romania has the lowest FDI stock per capita in the region. Unfortunately, in recent years, a decoupling of wage increases from labor productivity eroded one of the country’s significant competitive advantages, and added to the heightened officials’ aggressiveness towards foreign investors. If we want to benefit from FDI presence, public policies should be oriented towards a structural and strategic approach aimed at capitalizing on all the opportunities provided by FDI, and focusing on two complementary and mutually enforcing measures: improving the capacity of local companies to "learn" and “absorb” knowledge and technological developments from MNC, but also directing FDI towards activities with high added value. Ultimately, this means less emphasis on incentives for foreign investors and more accent on education, training and regional development.

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