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Article

Open Access

How Does FDI Affect Albania’s Export Performance

Author(s)

Aurel Koroci, Erjona Deshati

Full-Text PDF Download XML 1288 Views

DOI:10.17265/2159-5526/2016.11.007

Affiliation(s)

Albanian University of Tirana, Albania

ABSTRACT

Foreign Direct Investment (FDI) accounts for the largest and most important proportion of foreign capital in Albania, which undoubtedly plays an important role in the Albania's economic development growth. However, as the country continues to take various preferential policies to promote foreign investment and the good momentum of Albania's economic development, FDI increases. While there are considerable theoretical treatments of the FDI-export linkage, relevant empirical analyses have been limited. This paper attempts to close the gap by investigating the issue with the Albanian data. The estimates indicate that FDI indeed has had a positive impact on Albanian export performance. The findings provide rich source of information to policy makers, researchers, and the management of both foreign and domestic owned firms. From this point of view, the study aims to make an empirical research how the FDI has influenced the trade growth of the country. Based on the theory of FDI, this paper through an FDI and foreign trade model tests the correlation between two of them and effect of FDI in Albania's international trade with data from 1996-2014. The results of the study showed that there is a positive relation between FDI and exports in Albania.

KEYWORDS

FDI, exports, international trade, Albania

Cite this paper

Sociology Study, November 2016, Vol. 6, No. 11, 731-736

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