Received 06.01.2024, Revised 12.03.2024, Accepted 26.04.2024
The purpose of this study was to analyse existing investment projects in Albania and assess their economic feasibility to determine their impact on the country’s economic growth and development. The study examined 30 major investment projects in key sectors such as energy, infrastructure, and tourism. The study showed that the main investors in Albania are the Netherlands, Switzerland, Canada, Italy, Turkey and Austria, which are actively investing in the development of renewable energy sources, transport infrastructure and light industry. The analysis confirmed that the volume of investment, macroeconomic stability and government support are key factors in the successful implementation of projects. The SWOT analysis showed that Albania has significant potential to attract foreign investment due to its favourable geographical location, political stability and natural resources, but faces challenges such as underdeveloped infrastructure and high levels of bureaucracy. Investment projects have had a positive economic and social impact, including reducing energy dependence, developing tourism infrastructure, and improving logistics capabilities. Recommendations were made to optimise state support for investors, invest in infrastructure, improve the skills of the workforce, and support small and medium-sized businesses. The proposed recommendations will help improve Albania’s investment climate and ensure further growth in foreign investment, which will have a positive impact on the country’s economic development. At the same time, these recommendations may also be useful for other countries with similar economic levels of development seeking to attract foreign investment and stimulate their economic growth
investment; foreign financing; financial initiatives; sustainable development; country’s profitability
[1] 2024 Investment Climate Statements: Albania (2024). Retrieved from https://www.state.gov/reports/2024-investment-climate-statements/albania/.
[2] Ağazade, S., & Karasakaloğlu, B. (2022). Foreign direct investments and tourism: A cross-sectional analysis. Tourism Planning & Development, 20(5), 790-804. doi: 10.1080/21568316.2022.2135589.
[3] Albania Foreign Direct Investment. (2024). CEIC. Retrieved from https://www.ceicdata.com/en/indicator/albania/foreign-direct-investment.
[4] Albania: Investing in Albania. (2024). Retrieved from https://www.lloydsbanktrade.com/en/market-potential/albania/investment.
[5] Alp, O., & Ajam, M. (2024). An approach to plan infrastructural investments to facilitate domestic trade. INFOR: Information Systems and Operational Research, 62(3), 529-555. doi: 10.1080/03155986.2024.2311472.
[6] Atilaw Woldetensaye, W., Sisay Sirah, E., & Shiferaw, A. (2022). Foreign direct investments nexus unemployment in East African IGAD member countries a panel data approach. Cogent Economics & Finance, 10(1), article number 2146630. doi: 10.1080/23322039.2022.2146630.
[7] Bank of Albania. (2024). Statistics. Retrieved from https://www.bankofalbania.org/Statistics.
[8] Choi, J., & Minondo, A. (2019). The trade effects of Albania’s trade agreements with CEFTA members. Post-Communist Economies, 31(4), 451-463. doi: 10.1080/14631377.2018.1537736.
[9] D’Orazio, P., & Löwenstein, P. (2020). Mobilising investments in renewable energy in Germany: Which role for public investment banks? Journal of Sustainable Finance & Investment, 12(2), 451-474. doi: 10.1080/20430795.2020.1777062.
[10] da Costa, L.F.C., & Kropp, J.P. (2019). Estimating investments in knowledge and planning activities for adaptation in developing countries: An empirical approach. Climate and Development, 11(9), 755-764. doi: 10.1080/17565529.2018.1562865.
[11] Dedi, V. (2024). Albania: The ‘sleeping renewable energy giant’ of the Balkans? Tirana Observatory. Retrieved from https://tiranaobservatory.com/2024/01/31/albania-the-sleeping-renewable-energy-giant-of-the-balkans/.
[12] Deng, B., Wang, T., Tao, C., & Ji, L. (2023). Targeted poverty alleviation and corporate investment in poor counties: An empirical analysis from the geographical distribution of new subsidiaries of listed firms. China Journal of Accounting Studies, 12(1), 47-70. doi: 10.1080/21697213.2023.2274569.
[13] Djokoto, J.G., Hysa, E., & Mansi, E. (2023). Foreign divestment and domestic investment in Eastern European countries. Post-Communist Economies, 36(1), 90-104. doi: 10.1080/14631377.2023.2237211.
[14] Engler, S. (2020). “Fighting corruption” or “fighting the corrupt elite”? Politicizing corruption within and beyond the populist divide. Democratization, 27(4), 643-661. doi: 10.1080/13510347.2020.1713106.
[15] Er, S.T., Demir, E., & Garcia-Gomez, C.D. (2024). Climate vulnerability and capital investments in tourism. Current Issues in Tourism, 1-6. doi: 10.1080/13683500.2024.2330681.
[16] Erakhtina, A.A. (2022). Investments in healthcare, life expectancy, and economic growth. Problems of Economic Transition, 63(1-3), 20-33. doi: 10.1080/10611991.2022.2113312.
[17] European Bank for Reconstruction and Development. (2024). The EBRD in Albania. Retrieved from https://www.ebrd.com/albania.html.
[18] Faruque, M.O. (2021). Foreign investment, mining conflict, and contested development in Bangladesh. Canadian Journal of Development Studies, 42(4), 537-555. doi: 10.1080/02255189.2021.1902289.
[19] Fliers, P.T. (2024). The impact of market power and financial flexibility on corporate investment policy. Applied Economics, 1-16. doi: 10.1080/00036846.2024.2402575.
[20] Grieveson, R., Holzner, M., & Vukšić, G. (2020). Regional economic cooperation in the Western Balkans: The role of stabilization and association agreements, bilateral investment treaties and free trade agreements in regional investment and trade flows. Eastern European Economics, 59(1), 3-24. doi: 10.1080/00128775.2020.1846130.
[21] Gu, A., & Zhou, X. (2020). Emission reduction effects of the green energy investment projects of China in belt and road initiative countries. Ecosystem Health and Sustainability, 6(1), article number 1747947. doi: 10.1080/20964129.2020.1747947.
[22] Inaba, K.-I. (2020). Inbound portfolio bond investments and domestic monetary policy effect in emerging countries. Applied Economics Letters, 28(7), 535-540. doi: 10.1080/13504851.2020.1761941.
[23] International Labour Organization. (2024). Albania. Retrieved from https://www.ilo.org/regions-and-countries/europe-and-central-asia/ilo-office-central-and-eastern-europe/where-we-work/albania.
[24] Jacques, O. (2020). Austerity and the path of least resistance: How fiscal consolidations crowd out long-term investments. Journal of European Public Policy, 28(4), 551-570. doi: 10.1080/13501763.2020.1737957.
[25] Jaworek, M., Szałucka, M., & Karaszewski, W. (2019). Limiting factors of foreign direct investment undertaken by Polish enterprises. Journal of East-West Business, 25(3), 293-317. doi: 10.1080/10669868.2019.1616648.
[26] Kastratović, R. (2023). The impact of foreign direct investment on agricultural exports: The evidence from developing countries. The Journal of International Trade & Economic Development, 33(2), 276-293. doi: 10.1080/09638199.2023.2175306.
[27] Kim, M., Yang, J., Song, P., & Zhao, Y. (2020). The dependence structure between equity and foreign exchange markets and tail risk forecasts of foreign investments. Quantitative Finance, 21(5), 815-835. doi: 10.1080/14697688.2020.1812701.
[28] Kodali, P.B. (2023). Achieving universal health coverage in low- and middle-income countries: Challenges for policy post-pandemic and beyond. Risk Management and Healthcare Policy, 16, 607-621. doi: 10.2147/RMHP.S366759.
[29] Li, H., Yoo, S., & Kettinger, W.J. (2021). The roles of IT strategies and security investments in reducing organizational security breaches. Journal of Management Information Systems, 38(1), 222-245. doi: 10.1080/07421222.2021.1870390.
[30] Lopes Júnior, E.P., Bandeira de Mello, R., & Bucheli, M. (2024). Political influence on the investment of state-owned enterprises. Journal of Economic Policy Reform, 1-22. doi: 10.1080/17487870.2024.2353311.
[31] Maček, A., Ovin, R., Divjak, M., Skoko, H., & Horvat, T. (2020). Foreign direct investments’ openness in local communities – the case of Slovenia and Serbia. Economic Research, 34(1), 1013-1032. doi: 10.1080/1331677X.2020.1819848.
[32] Matuka, A., & Asafo, S.S. (2021). Effects of services on economic growth in Albania: An ARDL approach. The Journal of International Trade & Economic Development, 30(6), 856-881. doi: 10.1080/09638199.2021.1910723.
[33] Merino, R., & Chinchay, A. (2022). Between the environment and the economy: Foreign investments, global conservation, and Indigenous nations in the Amazon. Globalizations, 19(6), 887-896. doi: 10.1080/14747731.2022.2035056.
[34] Merlin, J., Laurent, B., & Gunzburger, Y. (2021). Promise engineering: Investment and its conflicting anticipations in the French mining revival. Economy and Society, 50(4), 590-617. doi: 10.1080/03085147.2021.1903772.
[35] Mikheeva, O. (2023). Development banks and state-led investments: New research questions. Innovation and Development, 14(1), 111-133. doi: 10.1080/2157930X.2023.2285891.
[36] Minović, J., Stevanović, S., & Aleksić, V. (2020). The relationship between foreign direct investment and institutional quality in Western Balkan countries. Journal of Balkan and Near Eastern Studies, 23(1), 40-61. doi: 10.1080/19448953.2020.1818038.
[37] Mora, S. (2023). Socio-environmental conflicts and land governance: A study of Chinese infrastructure investments in Argentina. Review of International Political Economy, 30(6), 2035-2051. doi: 10.1080/09692290.2023.2248151.
[38] Paterson-Jones, N.G. (2019). Tackling Europe’s infrastructure needs: The European fund for strategic investments. Journal of Mega Infrastructure & Sustainable Development, 1(1), 54-78. doi: 10.1080/24724718.2019.1594567.
[39] Petersen, G. (2020). Early democratization, corruption scandals and perceptions of corruption: Evidence from Mexico. Democratization, 28(2), 333-352. doi: 10.1080/13510347.2020.1819246.
[40] Ramasamy, B., & Yeung, M. (2020). China’s outward foreign direct investment (OFDI) to developing countries: The case of Central and Eastern Europe (CEE). Journal of the Asia Pacific Economy, 27(1), 124-146. doi: 10.1080/13547860.2020.1790182.
[41] Rrapaj Kolasi, J., & Kolasi, K. (2023). The political economy of passive revolution in Albania: The neoliberal paradox and transformation-democratization nexus. Journal of Balkan and Near Eastern Studies, 25(6), 963-981. doi: 10.1080/19448953.2023.2167342.
[42] Sahab, A., Nauvarian, D., Larasati, N.D., & Hennida, C. (2024). Indonesian foreign investment policy under oligarchic economy: Striking balance between economic nationalism and liberalization. Journal of the Asia Pacific Economy, 1-19. doi: 10.1080/13547860.2024.2361575.
[43] Shanmugam, K., Chidambaram, V., & Parayitam, S. (2022). Effect of financial knowledge and information behavior on sustainable investments: Evidence from India. Journal of Sustainable Finance & Investment, 1-24. doi: 10.1080/20430795.2022.2073958.
[44] Sharmiladevi, J.C. (2023). Impact study of agricultural value added on foreign direct investment, economic development, trade openness for India following ARDL approach. Cogent Economics & Finance, 11(2), article number 2270595. doi: 10.1080/23322039.2023.2270595.
[45] Toh, M.Y., Albada, A., & Ng, S.H. (2023). Effect of country governance on cross-border renewable energy investment and climate actions in emerging countries. Emerging Markets Finance and Trade, 59(13), 3813-3827. doi: 10.1080/1540496X.2023.2247139.
[46] Venkataramani, R., & Kayal, P. (2021). Systematic investment plans vs market-timed investments. Macroeconomics and Finance in Emerging Market Economies, 16(1), 157-176. doi: 10.1080/17520843.2021.1969086.
[47] World Bank Group. (2024). The World Bank in Albania. Retrieved from https://www.worldbank.org/en/country/albania.
[48] Yfantopoulos, J. (2023). The impact of under-investment on health in Southern and Central Eastern European Countries. Expert Review of Pharmacoeconomics & Outcomes Research, 24(1), 29-35. doi: 10.1080/14737167.2023.2267766.
[49] Zhao, X., & Lin, D. (2020). Managerial equity incentives and R&D investments in emerging economies: Study based on threshold effects. Asian Journal of Technology Innovation, 29(3), 325-348. doi: 10.1080/19761597.2020.1800496.