Determining Local Economic Development in the Rural Areas of Romania. Exploring the Role of Exogenous Factors

Abstract

Based on data collected for 398 communes from the North-West development region of Romania between 2007 and 2014, this article presents a local economic development (LED) index for rural communities and identifies the main factors which influence LED in these communities. Our results show that exogenous factors, such as location in the influence area of urban communities and the existence of a direct connection to the European Road Network, influence the level of LED. At the same time nor the aforementioned exogenous factors nor other exogenous factors, such as non-refundable investments programs in local core infrastructure (financed by the European Union and the Romanian Government) which were designed to accelerate/spur economic development, as well as direct connections to the National Roads Network, do not have any statistically significant influence on spurring/accelerating LED (at least in this short period of time).