How have Foreign Direct Investments Influenced Economic Development in Albania, for the Period 2015 – 2023

Abstract

This paper examines and analyzes the impact of foreign direct investment (FDI) on the Albanian economy, particularly in the employment sector, exports, GDP growth and improvement of the business climate, also identifying the challenges that have occurred during the period 2015 - 2023. Foreign direct investment (FDI) plays an important role in Albania's economic development, contributing to increased production, improved infrastructure, and the creation of new job opportunities. The study is based on the methodology of statistical analysis, using FDI data from various economic sectors and applying econometric models to assess the effects of investments in specific sectors such as agriculture, mining, and services. Through this analysis, the paper identifies trends and factors that help or hinder investment flows and provides recommendations for improving investment policies to attract foreign investors. One of the main elements of the study is the analysis of the impact of FDI on job creation, assessing the benefits and challenges that this phenomenon has brought to the most affected sectors such as services and the construction industry. In addition, the paper examines how FDI has contributed to increased competitiveness and innovation, as well as improved efficiency and technology in domestic industry. In conclusion, this study highlights the importance of policy strategies to attract and retain foreign investors, recommending increasing transparency, improving the business climate, and strengthening institutions that support economic development and investment sustainability. The paper also highlights the importance of supporting key sectors and creating conditions for the sustainable development of foreign investment in Albania.