Macroeconomic Factors Influencing Foreign Direct Investment (FDI) in Moldova and Romania (2005-2024)

Abstract

This study examines the primary macroeconomic determinants of Foreign Direct Investment (FDI) inflows in the Republic of Moldova and Romania over the 2005–2024 period. Utilizing a multiple linear regression model, specifically ISD = β₀ + β₁·GDPGrowth + β₂·Inflation + β₃·TotalExports + β₄·ExchangeRate + ε, the paper tests the hypothesis that economic dynamics, price stability, and commercial openness significantly influence external capital attraction. Data was sourced from the World Bank, the National Bank of Moldova, and the National Bureau of Statistics. The findings confirm that GDP growth and export volumes are positively correlated with FDI inflows, whereas high inflation and exchange rate volatility exert negative pressures. Comparatively, Romania exhibits higher and more stable FDI levels, linked to its European integration process and a more predictable macroeconomic environment. The conclusions suggest that macroeconomic stabilization policies and export diversification are essential tools for stimulating investment in both economies. CZU: 339.727.22:330.101.541(478+498); JEL: F21, E22, O11, O52