Analysis of Foreign Direct Investments in Romania

This paper presents a comprehensive and comparative analysis of foreign direct investments (FDI) conducted by companies seeking to expand their presence in international markets. Its primary aim is to explore the role of FDI and the multifaceted factors influencing the selection of specific regions in Romania as preferred investment destinations. Foreign direct investments are a crucial strategy for establishing and solidifying a long-term presence in foreign nations. The decision of where to invest abroad is complex and strategic, involving economic, social, technological, and infrastructural considerations. This study examines these factors to understand the preferences of foreign firms when choosing regions for direct investments. The analysis employs a conditional logit model, incorporating key variables. This model enables an in- depth exploration of the most attractive regions in Romania for foreign direct investments, offering valuable insights for international enterprises' strategic planning. The study starts with an examination of fundamental FDI concepts, delving into their distinctive characteristics and critically reviewing the existing literature. Subsequently, a comprehensive analysis of Romania is conducted, exploring its unique features, rich history, and diverse regions, all of which constitute its socio-economic landscape. This detailed overview provides the necessary context to understand why Romania is an appealing destination for FDI. During the research phase, the primary analytical tool used is the Conditional Logit Model, facilitating the selection of specific regions within Romania as investment destinations for foreign parent companies. Furthermore, the study presents the motivations behind this choice in comparison to potential alternatives offered by neighboring Moldova.