The issues of FDI-s in Albania during transition - Economicus

by, Holta Kora, Prof. Dr. Anilda Bozdo, Dr. Anila Fureraj

Abstract

The topic selected was oriented from the current issues in the field of investment and the impact they have on economic growth. An old saying implies that “Invest in real estate in places where everything or at least much of the resource is sold much cheaper compared to other countries “. This June of 2017 we accomplished for 27 years that Albania is open to foreign investors. But after 27 years there is no question that we are better compared to
what we were in foreign investments (FDI), but what is being discussed is that Albania continues to be at the lowest level of IHD in Region. Research shows that FDI has been a very important factor in economic production in CEE and SEE countries during the transition years. The strong link between FDI and GDP is evidenced by two facts: FDI inflows -that have a positive impact on the country’s economic strength and high levels of GDP are a major motivator for higher FDI flows. The final conclusion also explains one of the reasons for the different model that has followed the development of FDI in SEE and CEE countries. This research conducts an empirical study, contributes to the analysis of FDI and economic growth issues currently faced by our country. In the study, an econometric method was used to reveal efficient and credible empirical findings on the 62 ECONOMICUS 17/ AUTUMN 2018 cause-and-effect relationship of FDI -growth in the last two decades. For the economic growth series (g) there are data for 17 years, where the last year is 2016. The empirical findings suggest that the absorption of FDI is positive and statistically significant for the country’s economic growth. For each unit of FDI increase the impact on the country’s economic growth will result in 3.88 unit. The most important recommendation suggests
that trade policy makers in Albania should apply FDI-absorbing policy, based on multilateral agreements, to achieve lasting long-term growth. This can be achieved by removing barriers related to FDI in the context of improving the investment climate in Albania.