FDI, Economic Growth, Agriculture.

How to Cite



This study examines the effect of FDI on economic growth and agriculture in Kosovo in the years 2010-2021. To quantify the effects of the explanatory variables on the explanatory variables, data was generated for the variables collected by the World Bank and the Kosovo Statistical Agency. The results of analysis (OLS robust) show is performed with two models.

Two models, OLSR1 and OLSR2, were developed to analyze the impact of independent variables on GDP and agriculture. OLSR1 found agriculture_land and government expenditure positively affect GDP, while OLSR2 found GDP positively affects agriculture_land, while inflation has a negative impact. The negative coefficients for FDI, interest rate, and government expenditure in OLSR2 suggest they negatively impact agriculture_land but are not significant. The results have important implications for policymakers in Kosovo, who aiming to attract more FDI and boost economic development.


Adefabi, R. A. (2011). Effects of FDI and human capital on economic growth in Sub-Saharan Africa. Pakistan journal of social sciences, 8(1), 32-38.

Akinlo, A. E. (2004). Foreign direct investment and growth in Nigeria: An empirical investigation. Journal of Policy modeling, 26(5), 627-639.

Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2004). FDI and economic growth: the role of local financial markets. Journal of international economics, 64(1), 89-112.

Alfaro, L., & Matthew, J. (2012). Foreign Direct Investment and Growth. Boston: The Evidence and Impact of Financial Globalization, Harvard Business School.

Alvaro, L., Chanda, A., Kalemli-ozcan, S., and Sayek, S. (2006), “How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages”, Working Paper 07-013.

Amendolagine, V., Boly, A., Coniglio, N. D., Prota, F., & Seric, A. (2013). FDI and local linkages in developing countries: Evidence from Sub-Saharan Africa. World Development, 50, 41-56.

Anwar, S., & Nguyen, L. P. (2010). Foreign Direct Investment and Economic Growth in Vietnam. Asia Pacific Business Review, 16(1-2), 183-202.

Bartels, F. L., & Crombrugghe, S. (2009). FDI Policy Instruments: Advantages and Disadvantages. Vienna: United Nations Industrial Development Organization.

Bengoa, M., & Sanchez-Robles, B. (2003). Foreign direct investment, economic freedom, and growth: new evidence from Latin America. European journal of political economy, 19(3), 529-545.

Borensztein, E., De Gregorio, J., & Lee, J. W. (1998). How does foreign direct investment affect economic growth? Journal of international Economics, 45(1), 115-135.

Bunte, J. B., Desai, H., Gbala, K., Parks, B., & Runfola, D. M. (2018). Natural resource sector FDI, government policy, and economic growth: Quasi-experimental evidence from Liberia. World development, 107, 151-162.

Çakërri, L. (2019). Ndikimi i Investimeve të Huaja Direkte mbi Rritjen Ekonomike në Shqipëri: Roli i Kapacitetit Absorbues. Tiranë: Universiteti i Tiranës, Fakulteti i Ekonomisë.

Denisia, V. (2010). Foreign Direct Investment Theories: An Overview of the Main FDI Theories”, European Journal of Interdisciplinary Studies, No. 3.

Dritsaki, C., & Dritsaki, M. (2012). Exports and FDI: A Granger causality analysis in a heterogeneous panel. Economics Bulletin, 32(4), 3128-3139.

Dritsakis, N., & Stamatiou, P. (2014). Exports, foreign direct investment, and economic growth for five European countries: Granger causality tests in panel data. Applied Economics Quarterly, 60(4), 253-272.

Epaphra, M., & Mwakalasya, A. (2017). Analysis of foreign direct investment, agricultural sector and economic growth in Tanzania.

Falki, N. (2009). Impact of foreign direct investment on economic growth in Pakistan. International Review of Business Research Papers, 5(5), 110-120.

Furtan, W. H., & Holzman, J. J. (2004). The Effect of FDI on Agriculture and Food Trade: An Empirical Analysis 1987-2001 (No. 1391-2016-117071).

Javorick, B. S. (2004). Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages. American Economic Review, 94(3), 605–627.

Jyun-Yi, W., & Chih-Chiang, H. (2008). Does foreign direct investment promote economic growth? Evidence from a threshold regression analysis. Economics Bulletin, 15(12), 1-10.

Kilic, C., Bayar, Y., & Arica, F. (2014). Effects of currency unions on foreign direct investment inflows: the European economic and monetary union case. International Journal of Economics and Financial Issues, 4(1), 8.

Kukaj, H., & Ahmeti, F. B. (2016). The importance of foreign direct investments on economic development in transitional countries: a case study of Kosovo. European Scientific Journal, 12(7).

Lipsey, R. E. (2004). Home-and host-country effects of foreign direct investment. In Challenges to globalization: Analyzing the economics (pp. 333-382). University of Chicago Press.

Lipsey, R. E., & Sjöholm, F. (2011). South–south FDI and development in East Asia. Asian Development Review, 28(2), 11-31.

Louzi, B. M., & Abadi, A. (2011). The impact of foreign direct investment on economic growth in Jordan. IJRRAS-International Journal of Research and Reviews in Applied Sciences, 8(2), 253-258.

Maku, O. (2015). Macroeconomic Consequences of Foreign Direct Investment in Nigeria: An Empirical Analysis. European Journal of Business and Management, 7(22).

Mehic, E., Silajdzic, S., & Babic-Hodovic, V. (2013). The impact of FDI on economic growth: Some evidence from Southeast Europe. Emerging Markets Finance and Trade, 49 (sup1), 5-20.

Mottaleb, K. A. (2007). Determinants of foreign direct investment and its impact on economic growth in developing countries.

Oloyede, B. B. (2014). Impact of foreign direct investment on agricultural sector development in Nigeria, (1981-2012). Kuwait Chapter of the Arabian Journal of Business and Management Review, 3(12), 14.

Omri, A. (2014). The nexus among foreign investment, domestic capital and economic growth: Empirical evidence from the MENA region. Research in economics, 68(3), 257-263.

Owutuamor, Z. B., & Arene, C. J. (2018). The impact of foreign direct investment (FDI) on agricultural growth in Nigeria (1979-2014). Review of Agricultural and Applied Economics (RAAE), 21(1340-2018-5169), 40-54.

Pegkas, P. (2015). The impact of FDI on economic growth in Eurozone countries. The Journal of Economic Asymmetries, 12(2), 124-132.

Santangelo, G. D. (2018). The impact of FDI in land in agriculture in developing countries on host country food security. Journal of World Business, 53(1), 75-84.

Siddique, H. M. A., Ansar, R., Naeem, M. M., & Yaqoob, S. (2017). Impact of FDI on economic growth: Evidence from Pakistan. Bulletin of Business and Economics, 6(3), 111-116.

Sertoglu, K., Ugural, S., & Bekun, F. V. (2017). The contribution of agricultural sector on economic growth of Nigeria. International Journal of Economics and Financial Issues, 7(1), 547-552.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Copyright (c) 2023 Fatjona PARALLANGAJ


Download data is not yet available.