Foreign Direct Investment (FDI) or Remittances? Which Contributes the Most to the Albanian Economy?
Alban Korbi – University of Tirana, Square „Nënë Tereza“, Tiranë, Albania
Blisard Zani – University of Tirana, Square „Nënë Tereza“, Tiranë, Albania
7th International Scientific ERAZ Conference – ERAZ 2021 – Selected Papers: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, Online/virtual, May 27, 2021
ERAZ Conference Selected Papers are published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia
ERAZ conference partners: Faculty of Economics and Business, Mediterranean University, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; AMBIS University, Prague – Czech Republic; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia
ERAZ Conference 2021 Selected Papers ISBN 978-86-80194-47-9, ISSN 2683-5568, DOI: https://doi.org/10.31410/ERAZ.S.P.2021
Foreign direct investments;
Gross domestic product;
Abstract: Foreign direct investment (FDI) and remittances entering an economy often play a very important role in the development and growth of economies year after year. Especially for economies with similar typologies and characteristics like that of Albania, both of these elements promote economic development and serve as financial incentives. This paper aims to assess the contribution of remittances and foreign direct investment in the Albanian economy in the last three decades, through a multifactorial econometric model. The model uses three endogenous variables, the value of remittances, the value of a foreign direct investment and the value of gross domestic product for the time series 1992 – 2019. As it results from the analysis of the econometric model, both remittances and foreign direct investment payments have a positive impact on economic growth and the value of gross domestic product. It is also evident that remittances are the ones that affect the gross domestic product more compared to foreign direct investment.
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