Foreign direct investment as a driving factor in Albanian economic growth : the attractiveness of the prefecture of Korca (Albania) for small Greek foreign direct investors, the case of Greek SMEs

Abstract

FDI is one of the most important ways of doing business in today's society benefiting to both, multinational companies as well as to countries enhancing their economies. Albania is a country with a relatively new free market system of economy being opened to private business activities around the 1990es. The country has, since then, seen significant progress in the economy being ranked as one of the countries with the most enhanced economic growth in the Balkans region. One of the factors to which this growth is attributed is FDI which has provided large amounts of financial capital as well as intellectual capital. The aim of this dissertation has been to investigate the extent to which FDI supports economic growth in Albania and examine the determinants of FDI in the region of Korça. Linear regression analysis was done on data to analyse the dole of FDI in the economic growth in Albania. In addition, surveys were distributed and two representatives of foreign companies were interviewed in order to assess the attractiveness of Korça region to MNCs. This research has found that FDI affects economic growth while the data included in the analysis provided that FDI plays an important role in the Albania economy. Most of the companies which operate in Korça regional market are primarily market-seekers concentrating their investment in expanding their market share. The availability of resources and human capital as well as the reasonable cost of raw materials is another factor which encourages foreign companies to invest in Korça.