Italian investments in the agglomeration of Timisoara in Romania: threat or opportunity for the economic development?

The presence of foreign activities in a host country, by means of cooperation agreements and outward foreign investments, can induce positive and negative effects. These effects are closely related to the typology of the foreign activities, to the interactions between foreign and local firms and to the development of the host country. By focusing on the textile-clothing agglomeration in Timisoara, in Central Eastern Europe, the present paper aims to investigate whether the Italian presence in the agglomeration represents an opportunity (development path) or a threat (dependent path) to foster the socio-economic development of the area. To achieve this goal a micro-level investigation on a sample of 90 firms, both Italian and Romanian, located in Timisoara is described and the results of the factor and cluster analyses are presented. Keywords: inward FDI, agglomeration, economic development, host country, impact JEL Classification: F21, R11, R15