Elena Druica

The impact of fiscal policy on foreign direct investments. Empiric evidence from Romania

Economic stimulus programmes can be an incentive for foreign investment, but many developing countries do not have the financial resources to successfully compete with the investment promotion packages of developed countries. Once the Central and Eastern European (CEE) countries acceded to the eurozone, they will lose their monetary instruments to adjust the macroeconomic imbalances. Using linear regression, this article presents the impact of the fiscal and monetary policies on attracting the foreign direct investments (FDIs) in Romania, based on monthly data series during 2000–2010. Based on economic literature and on such empiric analysis, the article will propose some directions for the Romanian macroeconomic policy in the short-term in the context of crisis, because the FDIs are the engine for recovery and economic growth. In Romania, empiric results have shown that monetary factors such as higher interest rates and higher inflation attracted FDIs. Fiscal factors (mainly direct taxes) seem to play a less important role, being relevant only in the long-term. So, Romania should also focus on improving the other non-financial factors that greatly influence the investment environment here (infrastructure, legal and political stability). Only then can the fiscal stimulus be effective in attracting FDIs and supporting the economic growth in the same time. The article begins with presenting some findings from the economic literature regarding taxation and FDIs, it then follows the empiric analysis for Romania and ends with conclusions and some issues for a further research.

Residential Real Estate in Europe: An Exploration of Common Risk Factors

Abstract We conduct an exploratory analysis using proxy measures of cross-sectional returns and rental yields in residential real estate. Asset pricing models predict that expected returns should exhibit some sensitivity to one or several fundamental variables that represent a common source of undiversifiable risk. Residential real estate, just like works of art and collectibles, is unique because it represents both an investment vehicle and a durable consumption good. Its pricing and returns should thus reflect both the benefits from portfolio diversification and the effect of supply and demand. In this paper, we investigate the variation in proxy returns and proxy rental yields across 34 major European cities, using a handful of independent variables that should account for the influence of market risk, inflation, and liquidity. In spite of obvious limitations stemming from our sample, we find that the explanatory power of our model is unusually high for a cross-sectional data analysis. Some of our findings concur with other studies showing that in spite of strong segmentation, real estate markets respond to the same structural risk factors. A good portion of our results, however, is hard to explain and interpret. Either we need to take into account cultural differences between Eastern and Western Europe as part of a behavioral approach, or we have to concede that we have been misled by the mismatch in the level of aggregation and the crude estimation of the dependent variables.

Investigating the Costs of Education in the European Union

Abstract Education is the starting point of the future economic development, a precondition for achieving economic growth. Even if it doesn’t represent an insurance policy in relation to the unemployment phenomenon, the education fulfills a major condition for finding a job. Among other factors, the increasing percentage of young people finishing a form of higher education and not finding a job in connection to their graduation form, or not finding a job at all, suggests a decrease in employee credibility of the diplomas and therefore a significant decrease in employment among young people. According to the Eurostat, in 2013 the unemployment rate of young people finishing a form of higher education and aged less than 29 years old was 12.7%, much higher than in 2008 when it was 7.4%. The main purpose of this study is to discuss the main factors identified in the literature that lead young people in the EU countries to attempt higher education or not. Based on the data provided by Eurostat, OECD and World Bank, the paper provides useful information regarding the cost of the education in the European Union countries. Also, a comparative analysis between Romania and European Union countries will be conducted, regarding the costs of the education, using simple regressions and Principal Component Analysis.

Students’ Perspective on Romanian Higher Education Quality: A Statistical Approach☆

Abstract A recent survey (made by Universitas 21), which took into account 50 countries worldwide, has ranked Romania 42nd in the world, in a ranking of the best university systems, managing to exceed only 3 countries from the European Union. By comparing with previous years, the rank has slightly lowered. The present study attempts to conduct an overview on the state of the higher education national system with the purpose of making improvements to it. Firstly, the paper consists of presenting the general data of the context in which the Romanian higher education is situated. The SWOT analysis conducted in various universities from Romania, are summarized, following with the broad shaping of the elements that define the quality of higher education. Secondly, the study aims to conduct a statistical survey among Romanian students for the assessment of general trends in their opinion upon the discussed topic.As the actual beneficiaries of the services offered by the Romanian universities, the students have a significant importance and thus, based on the answers, we prepare from their perspective a SWOT analysis of the Romanian higher education quality.The results establish in an easy and precise manner the strengths, weaknesses, opportunities and threats facing the educational system, after which measures can be taken in order to improve, or better said, to optimize the processes of universities in the country.

From Neo-Stalinism to Sluggish Markets: Transition in Romania

The study of post-communist economies in Eastern Europe continues to be a generous and insightful source of valuable lessons in social and economic transition, particularly when approached through the lenses of integration and globalization. The present chapter uses a vivid historical perspective to follow the Romanian economy and society through a long string of successive and consequential changes, culminating with the transition from communism to free markets. A crucial factor in this approach is to understand history as a complex, path dependent interaction. The main focus of the analysis is on the accumulation and depletion of social capital, before and after the communist regime. The rise of free markets is discussed in connection with the rise of consumerism, and it is argued that the long–term sustainability of any system, including, but not limited to post-communist Romania, depends on the interplay between social and natural capital. The looming economic and environmental challenges ahead can be handled only if social trust makes collective action possible.