Revista Român ă de Statistic ă – Supliment nr. 10 2015 137STUDY ON EVOLUTION OF FOREIGN [604693]

Revista Român ă de Statistic ă – Supliment nr. 10 / 2015 137STUDY ON EVOLUTION OF FOREIGN
DIRECT INVESTMENT FLOWS – MODEL
ANALYSIS
Prof. Constantin Anghelache PhD.
Prof. Gabriela Victoria Anghelache PhD. Olivia Georgiana NI ȚĂ PhD. Student: [anonimizat], in Romania, the rhythm of the participation of the foreign capital to the direct investments recorded positive evolutions. This evolution has been generated by the existence of certain overall attractive conditions for the foreign investors at the level of our country, by the industry restructuring
as well as by the development of the production of multiple services. It is true that, in comparison with other EU member states, the situation of Romania as regards the drawing of DFI did not reach a too advanced level, this fact being obvious out of the representation of the dynamics of the investments fl ows de investments at the
European level. The main reason generating the low rhythm of drawing the foreign capitals Romania, after a period of economic boom, marked in 2008, consisted mainly of the economic instability a faced after the starting of the economic- fi nancial crisis.
Key words: development, fl ows, model, foreign direct investment, capital,
European level, national level
Analysis of fl ows of foreign direct investment at european level
A crucial issue for the developing countries, which aim to consolidate their market position, is given by the drawing of direct foreign investments . In this respect,
during the last two decades, in Romania, the rhythm of the participation of the foreign capital to the direct investments recorded positive evolutions. This evolution has
been generated by the existence of certain overall attractive conditions for the foreign investors at the level of our country, by the industry restructuring as well as
by the development of the production of multiple services. It is true that, in comparison with other EU member states, the situation of Romania as regards the drawing of DFI did not reach a too advanced level, this fact being obvious out of the representation of the dynamics of the investments fl ows de
investments at the European level. The main reason generating the low rhythm of drawing the foreign capitals Romania, after a period of economic boom, marked in 2008, consisted mainly of the economic instability a faced after the starting of the economic- fi nancial crisis.

Romanian Statistical Review – Supplement nr. 10 / 2015 138Dynamics of the DFI fl ows draw at national level, during the period 2003
-2014, comparatively with the EU average
Data source: UNCTAD Statistics
This is easily noticeable out of the previously submitted graphical
representation, achieved on the basis of the data published by UNCTAD, , which
grasps the evolution of the fl ows of direct foreign investments drawn by Romania,
comparatively with the average achieved at the European Union level. Thus, we notice that the second point of recovery of the fl ow of direct foreign
investments drawn after the year 2003, from the point of view of the volume of foreign capitals drawn by our country, was achieved at the level of the year 2008, immediately after the adhesion of Romania to the European Union circumstances under which our country getting a high con fi dence degree in the vision of the foreign
investors. Nevertheless, the investing raising records a considerable diminishing as from the year 2009 on, the investments fl ows reaching the value of 2,363 million
USD by the end of the year 2011, this volume representing 15% of the average of the direct foreign investments drawn at the level of the European Union. The dynamics emphasized by the DFI fl ows at the level of the period 2012 -2014, is adjusting some
of the baleful gaps generated by the crisis effects in the context of the increase of the credits accessibility but the investing climate is not yet reconsolidated. From the perspective of the fl ows of direct foreign investments drawn at
the la level of the EU member countries, we notice that the Great Britain keeps on maintaining its leading position over the period 2003 – 2014, due to its political and economic stability which facilitates the entering of signi fi cant fl ows of foreign capitals
in the economy, by the end of the year 2014 recording DFI fl ows in value of 72,241
million USD, representing approximately 8 time more than the average of the DFI fl ows, achieved at the Union level.

Revista Român ă de Statistic ă – Supliment nr. 10 / 2015 139The evolution of the DFI fl ows drawn by the UE member countries,
comparatively with Romania
200,000
Data source: UNCTAD Statistics
The following 3 positions at the European Union level, from the point of view of the foreign capitals drawn at the level of the year 2014, are successively occupied by: the Holland, with DFI fl ows amounting 30,253 million USD, followed
by Spain, which records a level by 25 % lower, respectively 22,904 million USD. On the 4
th position in the top of the DFI fl ows drawn by the EU member countries
is placed Finland, with as major performance achieved at the level of the year 2014, by the drawing of foreign capitals amounting 22,904 million USD, practically by 4.5 more as against in 2012 (Fig. 10). Keeping of approaching the achieved outcomes as far as the foreign capitals drawn into economy in 2014 are concerned, we notice that the next ones in the classi fi cation, on the places 5 and 6, at the level of the EU, are France and Poland.
Thus, after the considerable increase of the DFI fl ow, achieved in the year 2013, of up
to 2.5 times bigger comparatively with the fl ow volume of 2012, France is recording
a new decline from investing point of view, managing to draw in the economy an amount of 15,191 million USD only, in the year 2014, representing a volume of the DFI fl ow by 65% smaller as against the adjustment achieved at the level of the year
2013. Under these circumstances, Poland is recording performances comparable with the level of the DFI fl ow achieved in France, in the year 2014, evidencing the
drawing of direct foreign investments in value of 13,883 million USD, by 8.4 % only less comparatively with France. Meantime, the DFI entries which penetrated the Polish market in 2014, represent by 77 % more comparatively with the fl ow drawn by
Romania within the same periodin. For the fi rst time during the last 10 years, Germany draws in the economy
foreign capitals at a level inferior to the one achieved by our country, the DFI fl ow
achieved by Germany at the end of 2014, representing 57 % only from the value achieved by Romania. Thus, in 2014, Germany achieves a DFI fl ow amounting a

Romanian Statistical Review – Supplement nr. 10 / 2015 140total value of 1,831 million USD, 10 times less as 2013, which is due to a possible re-
orientation of the foreign investments towards cheaper markets, holding a relatively developed infrastructure and offering long term conditions of development. From the point of view of the dynamics of the fl ows of the direct foreign
investments drawn by Romania, we can allege that our country is in a new period of transition, marked by the end of the recession period and the beginning of a period of economic recovery. Thus, after the successive diminishing of the foreign capitals entered into the Romanian economy, particularly evidenced mainly during the period 2009 – 2011, at the level of 2014, Romania is recording a certain constancy as for the variation of the DFI fl ows, which denotes a period of restoring the con fi dence of
the foreign investors in the potential and conditions offered by our country. Hence, in 2014, Romania is drawing a DFI fl ow amounting 3,234 million USD, by 6 – 7 %,
less than Croatia or Denmark but obviously superior to the volumes of the DFI fl ows
drawn during the same period by: Belgium, Bulgaria, Slovenia, Estonia, Slovakia, etc. Meantime, we notice that, under the circumstances of the banking system crisis, marked by an acute lack of capitals, as well as of the political instability in the region, the fl ows
of direct investments from Greece diminished by 23 %, at the level of the year 2014, if comparing with the situation in 2013, when a fl ow of DFI amounting 2,818 million
USD has been recorded.. Most probably, the effects of the economic instability which Greece has to face will be more underlined by the outcomes of the year 2015. In this context, on the ground of considerable variations at the level of the year 2014, of the DFI fl ows recorded at the European level, generated by the
permanent prospection of the market and the relocation of the investors interested to place their capitals countries which are offering favorable conditions for the investing developments and opportunities to get rapid pro fi ts, Romania must take advantage, by
keeping on continue the series of the structural reforms enforced up to now, through a better development of the infrastructure, by the improvement and transparency of the fi scal legislation as well as by enforcing steps meant to increase the con fi dence of the
foreign investors in the economic potential of our country and, implicitly, the drawing
of new investments.
The evolution of the direct foreign investments fl ows at national level
Further on, we shall extend the analysis by evidencing concretely the evolution of the investments fl ows at the level of Romania, during the period 2003
-2013, emphasizing their structure over the analyzed period. In this respect, we mention that the data basis being utilized, representing the very fundament of the economic analysis we are going to perform, has been built up in accordance with the evolutions stated out by the of fi cial reports published by the
National Bank of Romania, the structure of the net fl ow of direct foreign investments
indicated in the statistical interval 2003 -2013, being represented by participations to capital, re-invested net pro fi t as well as by credits engaged by the investors within the
group. As an overall tendency , after the period of economic boom of the year 2008,

Revista Român ă de Statistic ă – Supliment nr. 10 / 2015 141when Romania recorded a maximum of foreign capitals amounting 9,496 million
euro, no more re-invested pro fi ts have been recorded in the context of big losses
recorded by the investors as a consequence of the baleful effects generated by the economic- fi nancial crisis.
The dynamics and structure of the DFI fl ows in Romania during the period 2003 -2013
MEUR|
Year Total DFI
fl owNet
participations
to capitalParticipations to
the self-capitals Re-invested
net pro fi t Recorded
profi ts Recorded
losses Repatriated
dividends Net credits
received
col 1 = 2 + 8 2=3+4 3 4=5-6-7 5 6 7 8
2003 1,946 1,263 691 572 2,028 1,010 446 683
2004 5,183 4,484 3,032 1,452 2,723 703 568 699
2005 5,213 3,852 2,688 1,164 3,434 1,169 1,101 1,361
2006 9,059 6,832 4,159 2,673 4,112 855 584 2,227
2007 7,250 3,547 2,220 1,327 6,376 2,292 2,757 3,703
2008 9,496 4,873 5,265 -392 6,412 4,108 2,696 4,623
2009 3,488 1,729 3,118 -1,389 4,496 4,277 1,608 1,759
2010 2,220 1,824 4,067 -2,243 4,222 4,495 1,970 396
2011 1,815 1,512 4,009 -2,497 4,710 5,132 2,075 303
2012 2,138 795 2,676 -1,881 4,691 4,360 2,212 1,343
2013 2,712 2,427 2,764 -337 5,504 3,554 2,287 285
Total 50,520 33,138 34,689 -1,551 48,708 31,955 18,304 17,382
Source: yearly reports published by the National Bank of Romania
During the same period, after 2009, due to the signi fi cant losses recorded,
the level of the fl ows of investments decreased signi fi cantly, mainly because of the
withdrawals of certain foreign investors from the Romania market as well as due to the repatriations of the pro fi ts as a result of the lack of con fi dence from their side as
regards the anti-crisis considered by the executive. Thus, in the period 2010-2013, the level of DFI fl ows are quite modest and refer, particularly, to completions or increases
of capital, implied by the crisis effects.Practically, the economic- fi nancial crisis generated a considerable reduction of the
foreign capitals on the Romanian market, the situation being underlined also by the diminishing of the fl ows of direct foreign investments during the period 2009 – 2012.
In order to get an overall picture as clear as possible, we achieved a graphical representation of the evolution of direct foreign investments fl ows in Romania, during
the last decade. Thus, from the perspective provided by the achieved representation, we can allege that the evolution of direct foreign investments fl ows from our country,
points out a sinusoidal tendency during the period 2003 – 2013.

Romanian Statistical Review – Supplement nr. 10 / 2015 142The dynamics and structure of direct foreign investments fl ows from Romania
ș Participations to self -capitals ș Re-invested net pro fi t ș Net credits
received
Self- representation based on data provided by the NBR
A favoring factor of the increase of the direct foreign investments in our country, until 2008 has been represented by the privatization of some sectors of the national economy, the drawing of foreign capital to companies already created and the setting up of new commercial companies with foreign capital, the statement being not valid for period 2009 – 2012 as well. The period in which the foreign capital recorded signi fi cant increases is
represented by those years when important secures of the economy of our country have been privatized. In the previously submitted context and out of the underlined evolution based of the data published by the NBR, it is to note that starting with the year 2000 on, there was a steady tendency of increase for the DFI fl ow, the most signi fi cant period, with
noticeable outcomes, being represented by the interval 2003- 2008, when the fl ow of
direct net foreign investments increased from the value of 1,946 million euro in 2003, to 9, 496 million euro in 2008. Thus, during the period after the year 2003, there is an up warding evolution, with an accelerated rhythm, up to 2008, to be remarked in the context of the privatization of important sectors of the economy of Romania. Starting with the year 2009, a negative trend of the fl ow of direct net
foreign investments in Romania is evidenced, as they decreased from 9,496 million euro in 2008, to 3,488 million euro in 2009 only, 2,20 million euro in 2010, and subsequently, to 1,815 million euro in the year 2011. In 2012, the fl ow of direct net
foreign investments reached the level of 2,138 million euro, while the fi gure for 2013
counts for 2,712 million euro.

Revista Român ă de Statistic ă – Supliment nr. 10 / 2015 143 The investments achieved in Romania have been directed with priority
towards the sector of fi nancial intermediaries and insurances, as submitted in
the previous subchapters, which held, as an average, between 72-80 %, while the investments in non- fi nancial enterprises counted for about 23% weight. As noticeable,
this structure is representing too little the direct foreign investments in the production activity, which actually is the essential one. From the perspective of the re-invested pro fi ts, we notice that at the level
of the year 2013, Romania is recording a level of 5,504 million EUR, by 17 % more than in the previous year, recording meantime a loss of 3,354 million EUR, by approximately 18.5 % smaller than the one of 2012, which, corroborated with the participation to capital, 3 times bigger than of the previous period, generated a net result of the fl ow of direct foreign investments amounting 2,712 million EUR, by
approximately 27 % more than recorded at the level of 2012. Generally speaking, we can notice a massive intensi fi cation of the investments
during the post-adhesion period, at the of the year 2008, when the biggest contributions to the self-capitals were recorded as well, of a total value of 5,265 million EUR, which generated, at the end of the year, a net fl ow of direct foreign investments amounting
9,496 million EUR. Even since the level of 2008, the so-called phenomenon of disinvestment start getting established, the dynamics of the re-invested pro fi ts pointing
out a negative impact from the perspective of the volume of the DFI fl ows achieved at
national level, due to the fact that, after the starting of the economic crisis, the foreign investors preferred to repatriate, in form of dividends, a signi fi cant volume from the
achieved pro fi ts. Hence, by consolidating the data published by the National Bank of
Romania, regarding the evolution of the DFI fl ows, we can see that during the last
decade the foreign investors have repatriated in form of dividends, to the countries of origin, 18,304 million EUR, while during the same interval of time, the evolution of the fl ow of self-capitals amounts 34,689 million EUR.
However, we must emphasize that, due to the high volatility of the fl ows
of foreign investments, as demonstrated through the analysis of the dynamics of the foreign capitals during the last decade, it would be advisable that the entry of DFI in economy is supplemented by autochthonous investments both for generating a business climate balanced and competitive and, mainly reasons connected to the national security, as the privatizations in a body are considerably increasing the liquidity risk at level.
Conclusions
From the perspective of the fl ows of direct foreign investments drawn at
the la level of the EU member countries, we notice that the Great Britain keeps on maintaining its leading position over the period 2003 – 2014, due to its political and economic stability which facilitates the entering of signi fi cant fl ows of foreign capitals
in the economy, by the end of the year 2014 recording DFI fl ows in value of 72,241
million USD, representing approximately 8 time more than the average of the DFI fl ows, achieved at the Union level.

Romanian Statistical Review – Supplement nr. 10 / 2015 144 The following 3 positions at the European Union level, from the point of
view of the foreign capitals drawn at the level of the year 2014, are successively occupied by: the Holland, with DFI fl ows amounting 30,253 million USD, followed
by Spain, which records a level by 25 % lower, respectively 22,904 million USD. On the 4
th position in the top of the DFI fl ows drawn by the EU member countries
is placed Finland, with as major performance achieved at the level of the year 2014, by the drawing of foreign capitals amounting 22,904 million USD, practically by 4.5 more as against in 2012 (Fig. 10). Keeping of approaching the achieved outcomes as far as the foreign capitals drawn into economy in 2014 are concerned, we notice that the next ones in the classi fi cation, on the places 5 and 6, at the level of the EU, are France and Poland.
Thus, after the considerable increase of the DFI fl ow, achieved in the year 2013, of up
to 2.5 times bigger comparatively with the fl ow volume of 2012, France is recording
a new decline from investing point of view, managing to draw in the economy an amount of 15,191 million USD only, in the year 2014, representing a volume of the DFI fl ow by 65% smaller as against the adjustment achieved at the level of the year
2013. Under these circumstances, Poland is recording performances comparable with the level of the DFI fl ow achieved in France, in the year 2014, evidencing the
drawing of direct foreign investments in value of 13,883 million USD, by 8.4 % only less comparatively with France. Meantime, the DFI entries which penetrated the Polish market in 2014, represent by 77 % more comparatively with the fl ow drawn by
Romania within the same periodin. For the fi rst time during the last 10 years, Germany draws in the economy
foreign capitals at a level inferior to the one achieved by our country, the DFI fl ow
achieved by Germany at the end of 2014, representing 57 % only from the value achieved by Romania. Thus, in 2014, Germany achieves a DFI fl ow amounting a
total value of 1,831 million USD, 10 times less as 2013, which is due to a possible re-orientation of the foreign investments towards cheaper markets, holding a relatively developed infrastructure and offering long term conditions of development. From the point of view of the dynamics of the fl ows of the direct foreign
investments drawn by Romania, we can allege that our country is in a new period of transition, marked by the end of the recession period and the beginning of a period of economic recovery. Thus, after the successive diminishing of the foreign capitals entered into the Romanian economy, particularly evidenced mainly during the period 2009 – 2011, at the level of 2014, Romania is recording a certain constancy as for the variation of the DFI fl ows, which denotes a period of restoring the con fi dence of
the foreign investors in the potential and conditions offered by our country. Hence, in 2014, Romania is drawing a DFI fl ow amounting 3,234 million USD, by 6 – 7 %,
less than Croatia or Denmark but obviously superior to the volumes of the DFI fl ows
drawn during the same period by: Belgium, Bulgaria, Slovenia, Estonia, Slovakia, etc. Meantime, we notice that, under the circumstances of the banking system crisis, marked by an acute lack of capitals, as well as of the political instability in the region,

Revista Român ă de Statistic ă – Supliment nr. 10 / 2015 145the fl ows of direct investments from Greece diminished by 23 %, at the level of the
year 2014, if comparing with the situation in 2013, when a fl ow of DFI amounting
2,818 million USD has been recorded.. Most probably, the effects of the economic instability which Greece has to face will be more underlined by the outcomes of the year 2015. In this context, on the ground of considerable variations at the level of the year 2014, of the DFI fl ows recorded at the European level, generated by the
permanent prospection of the market and the relocation of the investors interested to place their capitals countries which are offering favorable conditions for the investing developments and opportunities to get rapid pro fi ts, Romania must take advantage, by
keeping on continue the series of the structural reforms enforced up to now, through a better development of the infrastructure, by the improvement and transparency of the fi scal legislation as well as by enforcing steps meant to increase the con fi dence of the
foreign investors in the economic potential of our country and, implicitly, the drawing of new investments.
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