What type of study is this?

This is a Vector Autoregression study (also classified as: Granger-causality analysis, Observational).

September 10, 2025

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

Key Points

Foreign direct investment positively influences economic growth in Albania, and vice versa, creating a reciprocal relationship that supports development.
Findings show a notable bidirectional relationship between foreign direct investment and GDP growth over 30 years, spanning from 1992 to 2022.
Utilizing a Vector Autoregression framework alongside Granger-causality analysis, the study evaluates annual economic data from 1992 to 2022.
Insights from the study emphasize the significance of fostering economic growth to attract foreign investment, particularly for policymakers.

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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Cite This Study

Kladiola Gjini (Mon,) studied this question.

synapsesocial.com/papers/68c199ee9b7b07f3a061bb59 https://doi.org/https://doi.org/10.31410/itema.2024.193

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