THE INFLUENCE OF FOREIGN DIRECT INVESTMENT ON ECONOMIC DEVELOPMENT: THE CASE OF THE REPUBLIC OF MOLDOVA
DOI:
https://doi.org/10.52326/jss.utm.2026.9(2).01Keywords:
foreign direct investment, economic growth, GDP per capita, labour productivity, foreign capital, investment in fixed assets, Republic of MoldovaAbstract
This study examines the relationship between foreign direct investment and the economic development of the Republic of Moldova by integrating a theoretical perspective with empirical analysis. Based on official statistical data and public institutional sources, it evaluates the dynamics of the main macroeconomic and investment indicators, the economic performance of enterprises with foreign participation, and their association with the evolution of GDP per capita. For the period 2015–2024, a multifactor econometric model is estimated in which the growth rate of GDP per capita is analysed in relation to a set of indicators reflecting the dynamics of foreign direct investment and several related economic variables relevant to assessing the relationship between foreign capital and economic growth. The results highlight the existence of positive relationships among the variables examined. Overall, the study suggests that foreign direct investment may constitute a relevant factor in supporting economic growth, provided that its effects are leveraged within a favourable investment and institutional environment.
References
Borensztein E, De Gregorio J, Lee J-W (1998) How does foreign direct investment affect economic growth? Journal of International Economics 45(1):115–135. https://doi.org/10.1016/S0022-1996(97)00033-0
Dunning JH (1988) The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies 19(1):1–31. https://doi.org/10.1057/palgrave.jibs.8490372
Dunning JH (1998) Location and the multinational enterprise: A neglected factor? Journal of International Business Studies 29(1):45–66. https://www.jstor.org/stable/155587 Accessed 5 March 2026
Arpan JS, Flowers EB, Ricks DA (1981) Foreign direct investment in the United States: The state of knowledge in research. Journal of International Business Studies 12(2):137–154. https://www.jstor.org/stable/154423 Accessed 6 March 2026
Graham EM, Krugman PR (1993) The surge in foreign direct investment in the 1980s. In: Froot KA (ed) Foreign Direct Investment. University of Chicago Press, Chicago, pp 13–36. https://www.nber.org/system/files/chapters/c6532/c6532.pdf. Accessed 6 March 2026
UNCTAD (2005) A decade of FDI liberalization: The evidence. https://unctad.org/press-material/decade-fdiliberalization-evidence. Accessed 6 March 2026
Mohapatra LM, Gopalaswamy AK (2016) FDI, domestic investment and 2008 financial crisis. Journal of Developing Areas 50(6):277–289. https://www.jstor.org/stable/26415666. Accessed 6 March 2026
Rama Devi J, Ganga Devi J (2025) A review of foreign direct investment (FDI) trends in emerging markets: Opportunities and challenges. International Journal for Multidisciplinary Research 7(4):1–11. https://www.ijfmr.com/papers/2025/4/50603.pdf. Accessed 6 March 2026
Wang D, Huang Q, Ye T, Tian S (2021) Research on the two-way time-varying relationship between foreign direct investment and financial development based on functional data analysis. Sustainability 13(11):6033. https://doi.org/10.3390/su13116033
UNCTAD (2021) Global foreign direct investment fell by 42% in 2020, outlook remains weak. https://unctad.org/news/global-foreign-direct-investment-fell-42-2020-outlook-remains-weak. Accessed 7 March 2026
UNCTAD (2021) World Investment Report 2021: Investing in sustainable recovery. United Nations, Geneva. https://unctad.org/system/files/official-document/wir2021_en.pdf. Accessed 7 March 2026
OECD (2020) Foreign direct investment flows in the time of COVID-19. OECD Publishing, Paris. https://www.oecd.org/en/publications/foreign-direct-investment-flows-in-the-time-of-covid-19_a2fa20c4- en.html. Accessed 7 March 2026
Moosa IA, Merza E (2022) The effect of COVID-19 on foreign direct investment inflows: Stylised facts and some explanations. Future Business Journal 8:20. https://doi.org/10.1186/s43093-022-00129-5
Yu M, Wang N (2023) The influence of geopolitical risk on international direct investment and its countermeasures. Sustainability 15(3):2522. https://doi.org/10.3390/su15032522
Ashutosh Chandra Dwivedi, Arpita Chandra (2026) Assessing the Impact of Geopolitical Risk on Foreign Direct Investment Inflows: Evidence from India. International Journal of Novel Research and Development ((IJNRD), | Volume 11, Issue 1, January 2026 | ISSN: 2456-4184 chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://ijnrd.org/papers/IJNRD2601327.pdf papers/search/publication/9193510. Accessed 7 March 2026
Tituleasa Costache DR, Mititean P (2025) The impact of foreign direct investment on economic development. CECCAR Business Review 6(3):15–27. https://ideas.repec.org/a/ahd/journl/v6y2025i3p15-27.html. Accessed 7 March 2026
Hâncu R, Jelimalai D, Ofrim G (2010) Investițiile străine directe – componentă importantă a fluxurilor economice internaționale. Economica 1(71):71–82. https://ase.md/files/publicatii/economica/ec2010_1.pdf. Accessed 7 March 2026
Prohnițchi V, Popa A, Lupușor A (2010) Impactul investițiilor străine directe asupra economiei Republicii Moldova. Expert-Grup, Chișinău. https://www.expert-grup.org/ro/biblioteca/item/349-impactulinvesti%C5%A3iilor-str%C4%83ine-directe-asupra-economiei-republicii-moldova. Accessed 7 March 2026
Invest Moldova Agency (2026) Studiul 4.0 privind impactul investițiilor străine directe asupra economiei Republicii Moldova. https://invest.gov.md/studiul-4-0-privind-impactul-investitiilor-straine-directe-asupraeconomiei-republicii-moldova/. Accessed 7 March 2026
National Bureau of Statistics of the Republic of Moldova (n.d.) Dynamics of the main macroeconomic indicators, 2014–2024. Statistical databank. https://statbank.statistica.md/PxWeb/sq/8a9e4d73-5d74-4c6bb773-7df7770657dc. Accessed 20 April 2026
National Bureau of Statistics of the Republic of Moldova (n.d.) Reconciliation of the quarterly GDP calculations to the annual calculations, categories of uses, current prices, 2014–2023. Statistical databank. https://statbank.statistica.md/PxWeb/sq/1895ad37-03fe-47b7-8a10-7a6c41ca6e38. Accessed 20 April 2026
National Bureau of Statistics of the Republic of Moldova (n.d.) Investments in non-current assets by forms of ownership, 2017–2024. Statistical databank. https://statbank.statistica.md/PxWeb/sq/75d2f8ac-ebe8-4146- 907c-847432b7b6e1. Accessed 20 April 2026
World Bank (n.d.) Foreign direct investment, net inflows. https://data.worldbank.org/indicator/BN.KLT.DINV.CD?end=2024&locations=MD&start=1992. Accessed 10 April 2026
National Bank of Moldova (n.d.) International accounts statistics. https://www.bnm.md/bdi/. Accessed 15 March 2026
UNCTAD (n.d.) Inward foreign direct investment stock as a percentage of GDP. UNCTADstat database. https://unctadstat.unctad.org/. Accessed 17 March 2026
National Bureau of Statistics of the Republic of Moldova (n.d.) Statistical databank: Economic statistics. https://statbank.statistica.md/pxweb/pxweb/en/40%20Statistica%20economica/. Accessed 20 April 2026
Stock JH, Watson MW (2019) Introduction to Econometrics, Global Edition. Pearson Education Limited, Harlow. https://www.princeton.edu/~mwatson/Stock-Watson_4E/Stock-Watson-Resources-4e.html. Accessed 15 April 2026
Comisia Națională de Strategie și Prognoză (2021) Suport de curs Econometrie. București. https://cnp.ro/wpcontent/uploads/2022/06/suport-de-curs-Econometrie.pdf. Accessed 15 April 2026
