Does Foreign Direct Investment and Trade Promote Economic Growth? Evidence from Albania

Albania has experienced a rapid transition from centrally planned economy to mixed since the fall of communism in 1989. Policy changes, trade liberalization, and privatization have come about at pace, allowing foreign direct investment (FDI) international become key components Albania’s economy. Against this backdrop, study investigates relationships among FDI, trade, economic growth Albania. Annual time-series data were obtained World Bank. Then, following econometric tests performed on variables representing FDI inflows, exports, GDP as proxies for growth: unit root test; test with structural break; Johansen cointegration analysis; error correction model; Granger causality test. The results revealed long-term relationship between growth. found unidirectional causality. Economic brought exports short term but not vice versa. In conclusion, policymakers need design policies that promote technology-based, export-promoting meet needs develop specialized sectors are competitive global market. Furthermore, salient takeaway is penetration export markets should be promoted much furtherance FDI.