Evaluation of Economic Growth in Albania in Relation to FDI and Other Indicators

Abstract

Foreign Direct Investment are a very important segment of the economic activity of a country, due to the effects that they bring. Foreign Direct Investments in Albania are often considered as the locomotive of the country because of their concentration in important sectors of its economy. In theory, in literature and also in practice, the effects of foreign direct investments (FDI) are known. FDI have brought significant positive effects on the economy, but this certainly does not mean that the presence of FDIs in the economy of a country is not associated with adverse effects Specifically the main purpose of this paper is the theoretical viewpoint and the links that it suggests for FDI in general. One of the main links that the theory suggests is the connection between FDI and economic growth. But later, as the ultimate purpose, remains the connectivity testing of FDIs in the country with economic growth, to test the authenticity of their connection, finding out whether this connection is statistically significant or not. The structure of this paper is divided into three main parts. Initially is intended to provide a theoretical frame and to look at the definitions and links of FDI with various economic aspects. Secondly we will make an empirical analysis of FDI connection with economic growth, which can be viewed in two perspectives: the diagnostic (graphic) and statistical (econometric connection). Finally we will give the conslucions on this subject.

DOI: 10.5901/ajis.2013.v2n3p239