Assessing the Links between FDI and Economic Performance through Econometric Models

Abstract

This study analyzes the relationship between economic performance and four macroeconomic indicators foreign direct investment, consumer price index, producer price index and employment in the period 2010-2024 for the countries Romania and Republic of Moldova. Three multiple regression models were obtained and differences were identified between the two economies in terms of the impact of macroeconomic indicators on economic performance. The results indicate that the economic performance of the Republic of Moldova is positively influenced by foreign direct investment, the consumer price index and employment and negatively by the producer price index. In Romania, price and employment indicators have a positive impact, while foreign direct investment has a negative impact on economic performance. The general aggregate model confirms that foreign direct investment, the consumer price index and the producer price index have a positive impact, while employment has a negative impact on economic performance. Therefore, the study highlights the structural differences between the two countries and the need to design tailored economic policies that maximize the positive impact of FDI and minimize the domestic consequences on economic performance. UDC: [339.727.22+338.51+519.237.5](478+498); JEL: F21, C19