Patterns of Foreign Direct Investment in Transylvania

Foreign direct investment (FDI) has gained significant importance over the past decade as a tool for accelerating growth and development of transition economies. It is widely believed that the advantages that FDI brings to the standard of living and prospects for economic growth of the host nation largely outweigh its disadvantages. Despite the growing interest in the subject, to our knowledge, there is still no satisfactory empirical work which can explain the determinants of the spatial distribution of FDI flows into the separate regions of Romania, one of the largest new EU-member states. Thus, this research attempts to fill this gap by using a primary data from a questionnaire that covers the entire transition period. The main goal of this study is to identify the main determinants of the direct foreign investments in Central, West and North West Romanian regions. Basically, the study is constructed so, that it will provide a list of the main strengths and weaknesses of Center, West and North West regions, that would influence a foreign investor to choose the proper location for a future investment when developing his strategy.