Foreign Direct Investments and the Real Convergence. An Approach for Romania and Bulgaria

This paper outlines the need for an analysis of the extent to which foreign direct investments (FDIs) affects real convergence expressed using the following selected macroeconomic indicators: Gross domestic product (GDP) per capita, the unemployment rate (UR), labour productivity (LP) per person employed and the minimum wage (MW). The purpose of this paper is to analyze the impact of foreign direct investment (FDI) on real convergence in Romania’s and Bulgaria’s economy during 2004-2014. The main results for both Romania and Bulgaria show that FDI can be considered important sources of growth for real convergence that have contributed to economic growth, increased labour productivity and increased the minimum wage except for the unemployment rate. The results confirmed our expectations because logically, foreign firms bring their own technology, appropriate for the work of the employees, in order for their employees to produce as much as possible and pay salaries relatively higher compared to companies with local capital, but they demand instead higher productivity.