Bucharest, Cluj-Napoca, Iasi, Timișoara, Craiova, Constanța, Galați, Brașov, Oradea and Ploiesti, lead the list of the most attractive cities in Romania, according to a World Bank report.
The study reveals that a positive correlation is noticed between the attractiveness index and the amount of foreign capital attracted by a specific city (for example, Brașov is ranked 8th in terms of both the attractiveness index and the attraction of foreign capital).
At the same time, the proximity of the western border offers clear advantages, because the western area is generally preferred by investors due to its location near the western European markets. Thus, the geographical position is obviously an attraction factor, especially for production centers.
Two indices were designed to assess the performance of Romanian cities: the competitive index (focused on current performance) and the attractiveness index (focused on potential performance).
It is no surprise that the most competitive city in Romania is Bucharest, the largest city that currently competes on an equal footing in terms of productivity with other important cities in the EU. The Capital is followed by other developed cities (Cluj-Napoca, Iasi, Timisoara, etc.), which are also important economic hubs.
Competitive secondary cities are essential for stronger regional performance, because they propagate growth and development in neighboring localities. The data showed a positive correlation between economic performance expressed in GNI/capita and the competitiveness index, which means that a competitive city really offers better opportunities to its citizens.
The report also shows that other cities (Ghimbav, Mioveni, Năvodari, Găesti, Otopeni, etc.) benefit greatly from their proximity to urban growth poles and this is reflected in the level of competitiveness. Moreover, it was observed that the value of the index is correlated with the level of specialization of a city (for example, Ghimbav is specialized in the aerospace industry, Mioveni is specialized in the automotive industry – both have high values of the competitiveness index).
All in all, this means that a higher degree of specialization within a city creates the premise of a higher level of competitiveness. Highly specialized cities, however, are susceptible to sudden economic changes. Thus, whenever possible, a balance between specialization and diversification must be taken into account at the local level, the World Bank also recommends.
According to the World Bank, the biggest opportunity for Romania and its cities is the reshoring phenomenon (the current plans of European companies to reduce or repatriate production value chains/facilities, given the increasingly problematic distances and commercial tensions that have escalated due to the pandemic).