THE IMPACT OF INWARD FDI ON TRADE: EVIDENCE FROM ROMANIA

The present paper provides a research on the extent to which the foreign direct investments are influencing Romania's foreign trade. The analysis temporary range is between the years 1998-2014. It is analysed the influence of the foreign investments effect on exports, respectively the country's annual imports, using as analytical method the linear regression. The research results reveal that FDI exert significant influences on both indicators, but with a larger impact on imports. From the analysis performed, it appears that FDI influence 51.7% of the variation in exports and 68.7% of the variation in imports, in accordance with the linear regression model. The multinationals in Romania are greater importers than exporters contributing to the increase of the trade balance deficit, aspect that does not represent a win-win situation for the country's economy. Ultimately the paper suggests some policies regarding an increase in exports and their reorientation towards to new markets.