ANALYSIS OF FDI LOCALIZATION ON THE ROMANIAN REGIONS

The choice of location is becoming increasingly important, requiring a better understanding of the internationalization process and of the factors influencing the spatial distribution of FDI. There have been numerous empirical studies that have focused on the location choices of FDI in developed countries. Since early-2000s these studies have also started to concentrate on the transition economies within the CEE region. Despite the growing interest in the subject we shall propose to identifying the main determinants of FDI localization on the Romanian counties using the data provided by the National Trade Register Office of Romania for the period 2005-2010 and National Institute of Statistics. 1. ADEMINISTRATIVE DIVISIONS IN ROMANIA After 1990, Romania shifted its spatial policy from a central-based policy to a regional-based policy, in compliance with EU-standards. According to four criteria (number of inhabitants, surface, cultural identity and functional-spatial relations;) Romania was divided 1998 into eight Development Regions. The eight regions serve as NUTS-II units and as a framework for development policies while the counties serve as NUTS-III units. The NUTS-II units are: North-East development region (Bacau County, Botosani County, Iasi County,Neamt County, Suceava County,Vaslui County), South-East development region (Braila County, Buzau County, Constanta County, Galati County, Tulcea County, Vrancea County), South development region (Arges County, Calarasi County, Dambovita County,Giurgiu County, Ialomita County, Prahova County, Teleorman County ), South-West development region (Dolj County, Gorj County, Mehedinti County, Olt County, Valcea County), West development region (Arad County, Caras Severin County, Hunedoara County, Timis County), North-West development region (Bihor County, Bistrita County, Cluj County, Maramures County, Satu Mare County, Salaj County), Center development region (Alba County, Brasov County,Covasna County, Harghita County, Mures County, Sibiu County), Bucharest-Ilfov development region (Ilfov County, Bucharest). 2. LITERATURE REVIEW: FDI REGIONAL DETERMINANTS Studies on the locational choices of FDI can be classified into two types in literature. First type explains the locational choices with some traditional locational factors like market potential, labour costs, economic growth, and government policies. Second type highlights a range of environmental variables that act as a function of political, economic, legal and infrastructural factors of a host country. At this purpose, we consider captures three dimensions of each region: the market size, agglomeration economies, and infrastructure. a) Market size can be analyzed based on the two types of variables: demand side variables and supply side variables. a.1) Demand side variables. ANNALS of the ORADEA UNIVERSITY. Fascicle of Management and Technological Engineering, Volume XI (XXI), 2012, NR1