Economic Growth, Foreign Investments and Exports in Romania: A VECM Analysis

Economic Growth, Foreign Investments and Exports in Romania: A VECM Analysis

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The present paper deals with the relationship between GDP, FDI and merchandise exports using a vector error-correction model (VECM).The empirical model is based on quarterly data for the period 2005-2014 in Romania.The buy pooph Granger causality test indicate a positive significant bidirectional relationship and between FDI and GDP and a unidirectional relationship between GDP and exports.The variance decomposition indicates that more than 50% of the fluctuations in FDI are explained by the shocks in GDP, while the 7201 diablosport predator 2 influence of shocks in exports is quite low.Fluctuations in GDP are largely explained by the shocks occurring in this variable.

As regards exports, 44% of fluctuations are due to FDI, while the impact of GDP reaches 13-15% after 10 quarters.