Foreign Direct Investments in Albania, Structure and Dynamics

Abstract

After the fall of communism regime, Albania has become a host country to foreign direct investments (FDI) from many countries around the world. Albania represents four of the five types of FDI: those which gain access to specific factors of production; those which gain access to disposable production factors; those which gain access to Albanian consumer markets and those which organize joint ventures.Our country widely supports the FDI as there are no high taxation and commerce barriers to gain access to the new markets. Foreign direct investments are a very important segment of the economic activity of a country. In theory and also in practice, there are recognized the effects of FDI. They have brought significant positive effects on the economy. One of the advantages of FDI is that they help in the economic development of the country where is invested.FDI are usually applied in developing countries. During the 90s, they were one of the major external financial sources for most countries that had an economic growth perspective. FDI have been a significant support for some countries which faced economic difficulties.The main aim of this paper is to analyze the theoretical part and the relations of FDI in general.Another aim of this paper is to provide a general picture of FDI in Albania over the years, the main sectors where they are centralised, districts / cities where they are allocated, and so on.At the beginning it is given a theoretical framework, definitions and relations of FDI to various economic aspects.Then it is described the evolution in time and the development of FDI in different levels, for example in the countries of origin, currency in which it is mostly invested, main sectors, etc.There is also a comparison of FDI in Albania in relation to other countries in the region and beyond. We have mentioned here also the factors that affect FDI.