How Does Foreign Direct Investment Influence Albania’s Economic Growth?

by | Jun 2, 2025 | DOI 2024 Conference Proceedings

Kladiola Gjini – University of Elbasan ‘Aleksandër Xhuvani’, Faculty of Economics, Economics Department, Albania

Keywords:
Albania;
FDI;
Economic growth;
VAR Model

DOI: https://doi.org/10.31410/ITEMA.2024.193

Abstract: In this study, we investigate the dynamic relationship between Foreign Direct Investment (FDI) and economic growth in Albania using a Vector Autore­gression (VAR) framework and Granger-causality analysis. Covering annual data from 1992 to 2022, the findings reveal a bidirectional link between FDI and GDP growth, suggesting that economic expansion not only attracts foreign investment but is also reinforced by it.

The results highlight the importance of sustained economic growth in fostering FDI inflows, offering critical insights for policymakers seeking to enhance Albania’s investment climate. Additionally, this research enriches the broader discourse on FDI-growth dynamics, providing relevant implications for emerging economies with similar structural characteristics.

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8th International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2024 – Conference Proceedings, Hybrid (Zayed University, Dubai, UAE), October 24, 2024

ITEMA Conference Proceedings published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ITEMA conference partners: Faculty of Economics and Business, University of Maribor, Slovenia; Faculty of Organization and Informatics, University of Zagreb, Varaždin; Faculty of Geography, University of Belgrade, Serbia; Institute of Marketing, Poznan University of Economics and Business, Poland; Faculty of Agriculture, Banat’s University of Agricultural Sciences and Veterinary Medicine ”King Michael I of Romania”, Romania

ITEMA Conference 2024 Conference Proceedings: ISBN 978-86-80194-89-9, ISSN 2683-5991, DOI: https://doi.org/10.31410/ITEMA.2024

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission.

Suggested citation
Gjini, K. (2024). How Does Foreign Direct Investment Influence Albania’s Economic Growth?. In A. Grecu, S. Štetić, & V. Kundi (Eds.), International Scientific Conference ITEMA 2024: Vol 8. Conference Proceedings (pp. 193-201). Association of Economists and Managers of the Balkans. https://doi.org/10.31410/ITEMA.2024.193

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