Albania a Destiantion for Foreign Direct Investments, Comparison with Other Countries of the Region

Ina Pagria, Dori Risilia, Dori Risilia, Eugen Pagria, Eugen Pagria


The reason why we have chosen this topic is related to the fact that foreign investment has been the main engine of global economic growth in recent years. The developments of recent years in our country have been positive in this regard, but there is still much work to be done with FDI. Foreign direct investment have very positive impact on the economies of host countries, as is the case in Albania, because they provide investments needed to increase economic and technology development, at a time when domestic savings cannot provide them. In addition, capital flows serve as a signal that indicates that the economic conditions of the country have changed in relation to those outside. Fighting the lack of capital from which have suffered closed markets, they favored the efficient use of these resources, and created a competitive environment that offers more high yield to investors. A long-term positive effect of FDI is the transfer from the countries of origin to their host countries, the production technology and the most efficient ways of industrial organizing. In this track, FDI also has a positive effect on the productivity of domestic firms. In general, mutual causal relationship between FDI and economic and political stability has been positive, i.e. economic and political stability has encouraged higher levels of FDI. On the other hand, high concentration of FDI in a country has a positive impact on the stability of the country. Another positive aspect is the fact that, despite the cyclicality trends, capital came in the form of FDI is not easily transferable within a short time, which presents less risk than other forms of financial capital for the country's monetary stability.

Keywords: investments, balance of payments, economy, stability, capital

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