How Have Recent Adverse Conditions Affected Romania’s Investment Attractiveness?
Year: 2025
Type: article
Abstract: The last few years have been characterized by adverse conditions that have substantially affected the Romanian economy, with major implications for investment attractiveness. Against this background, the objective of the paper is to investigate how Romania’s capacity to attract foreign capital has evolved, in the light of the most recent unfavourable economic and political dynamics. In this context, the article pursues several important objectives. The first objective is to review the literature that emphasized the relation between the macroeconomic environment and FDI flows. The second objective is to analyse the level of investment attractiveness of Romania, through the evolution of the country rating and investors’ perceptions of Romania as a destination country for FDI. The third objective is to identify the structural changes in FDI flows, but also of the factors that contributed to this evolution. Using both qualitative and quantitative approaches, the study evaluates Romania’s investment attractiveness through the evolution of its country rating and the perceptions of investors regarding Romania as an FDI destination. The results reveal that the investment attractiveness of the Romanian economy have slightly declined, under increased macroeconomic uncertainty, significant deterioration of public finances, and military conflicts taking place in the country’s immediate proximity. Moreover, they indicate a qualitative and structural change in foreign investments, more specifically, we are witnessing a diversification of the FDI portfolio and a shift towards areas with higher added value or with a lower initial capital requirement.
Author: DORINA CLICHICI
Institution: Romanian Academy
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7128328381
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