Henri L.F. de Groot (p), Thomas de Graaff , Maureen Lankhuizen

This paper tests the robustness of the various types of trade and investment barriers identified in the literature. Taking advantage of a large number of datasets, the paper provides a comprehensive analysis of the gravity literature on trade and FDI. We use multiple dimensions of distance, including cultural distance, institutional quality, costs of importing and exporting and political stability of both country of origin and destination. The paper assesses multiple dimensions of robustness: not only the sign and significance of coefficient estimates, but also the variation in the magnitude of the estimated effects by using response surface analyses. Preliminary results show that cultural distance, and the dummy variables for colony and a shared religion have a robust effect on FDI. The effect of cultural distance on FDI is negative and statistically significant in over 95 per cent of the regressions. This confirms that cultural distance is an important barrier to FDI. As for trade, we find that, within the overall barrier consisting of contracting costs and insecurity, only cultural aspects have a robust effect. Institutions, whether level or distance, do not appear to matter. Interestingly, we find that preferential trade agreements or common trade blocs have a robust, negative effect on FDI. The effect of the depth index for increasing integration is negative as well (though not always statistically significant). So, where integration has a positive effect on trade, this is not the case for FDI. These results indicate that (deepening) integration does not raise FDI. Overall, one third of the variables we tested are robust for trade and only one fourth for FDI.

Claudia Ionescu (p)

In introduction of this paper it will be presented a general perspective of FDI at global and EU level. As study case is going to present Romania and Bucharest Ilfov Region.
Nowdays regions are competing in foreign markets where there is significant variation in market conditions. It poses a much bigger challenge than when just competing at national level.
Small firms from Romania’s regions enter into foreign market initially to know the responsiveness to cross-country difference in culture, demography and market conditions. One objective is to balance pressures and be responsive to local situations of each region. Also there is varied pressure for lower costs and prices of the products and services offered. Outsiders may face a rules and regulations regarding technical standards, product certification, and prior approval of capital spending projects withdrawal of funds from the country and minority/majority ownership by local citizens.
Some national or local government may offer to foreign companies a helping hand in the forms of subsidies, privileged market access, technical assistance etc.
Strategic options for a company entering and competing in foreign market that decides to expand outside its domestic market and compete internationally or globally. Important strategic options for a company competing in international could be: export strategies, franchising strategies, a regional or multicountry strategy or global strategy.
So, the study case is going to present Bucharest Ilfov Strategy for FDI.

Laura Resmini (p), Simona Comi , Mara Grasseni

The nexus between Multinational Enterprises (MNEs) and the quality of both formal and informal institutions is one of the most robust topic within the research on FDI location choice. The economic literature has focused mainly on the costs of doing business in environments characterized by poor institutions, usually conceptualized at national level, and operationalized by the extent of red tape, bureaucracy, corruption and the overall quality of the legal system (Nielsen et al., 2017). However, institutional variance of different locations within a country may also affect the attractiveness to foreign investors. Based on institutional arguments, we further explore this issue by investigating econometrically the impact of judicial efficiency on the attractiveness to FDI of Italian municipalities. In doing so, we merge firm-level data from the Bureau Van Dijck Amadeus dataset for the period 2008-2013 with administrative data from ISTAT and Italian Ministry of Justice on the number of pending and incoming trials in 26 judicial districts and 166 court jurisdiction areas. The distinctive contribution of this paper is manifold. First, we are able to measure judicial efficiency as the average length of different types of judicial proceedings (i.e. contracts, labour, corporations, civil and criminal procedures) across local courts while controlling for foreign firm-specific characteristics, as well as other local factors able to affect the location of FDI at sub-national level. Secondly, it considers an ideal case: Italy is a centralized country, where the same laws apply in all the national territory, but the degree of law enforcement varies considerably across different courts. Thirdly, we can not only estimate separately the impact of formal and informal institutions on FDI location choice, but also explore their potential interplay in shaping the geographical distribution of FDI across Italian provinces. Lastly, our results have interesting policy implications, since they may help in highlighting the importance of non-targeted FDI policies as factors driving the location choice of MNEs.