An Analysis Of Fdi Effect In Promoting Foreign Trade Expansion: Albanian Case

Research Article
Aurel Koroci and Erjona Deshati
DOI: 
xxx-xxxxx-xxxx
Subject: 
science
KeyWords: 
Albania, FDI effect, trade growth, international trade
Abstract: 

Foreign direct investment (FDI) in developing countries brings economic development and enhances the international competitiveness of domestic enterprises. The entrance of FDI would normally be considered as a prerequisite for the success of the introduction of foreign capital. 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 taking various preferential policies to promote foreign investment and the good momentum of Albania's economic development, FDI increases. 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 with data from 1996-2014. The results of the study showed that there is a positive relation between FDI and international trade in Albania.