Foreign Direct Investment Case of Albania

Abstract

Albania faced a closed economy during the communist regime, which closed the doors towards development. After 1990, at the declaration of the democracy and the new era coming in the country, Direct Foreign Investment was one of the first pillars of economy given priority from the government. After 2000, FDIs increased the level of investment in Albania due to many facilities in their legal framework as well as economic one implemented by our government. The business sectors of Fasons is also having development and the current reforms are supporting their investments. FDIs give to Albania many advantages, especially for labor supply and specialization of workforce. Government is playing a key role in implementation of FDIs in the country, due to its measures through provision of legal framework and economic facilities. One of the main ideas of the thesis is “How easy is to settle a new business in Albania?” This thesis contains quarterly data from years 1991-2012 in percentage unit, which are enough to compose the regression equation for the econometric analysis and to have a real and exact result. The data are taken from a confident source such as Bank of Albania, and a regression analysis has been applied with a usage of a special test studies such as Johansen Co-Integration Test. As a conclusion, as expected , it is found that GDP and FDI are perfectly correlated with each other and lay their effect even to otherwise.