Open AccessForeign Direct Investment (FDI) or Remittances? Which Contributes the Most to the Albanian Economy?
Author(s) -
Alban Korbi,
AUTHOR_ID,
Blisard Zani,
AUTHOR_ID
Publication year - 2021
Publication title -
international scientific conference eraz. knowledge based sustainable development
Language(s) - English
Resource type - Conference proceedings
ISSN - 2683-5568
DOI - 10.31410/eraz.s.p.2021.47
Subject(s) - foreign direct investment , gross domestic product , economics , incentive , econometric model , investment (military) , value (mathematics) , product (mathematics) , international economics , monetary economics , economy , macroeconomics , market economy , geometry , mathematics , machine learning , politics , political science , computer science , law , econometrics
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.