ABSRJ 2020 Volume 11, Number 1

The determinants of foreign direct investment: empirical evidence from Kosovo

Arben Sahiti
University of Gjilan “Kadri Zeka”, Republic of Kosovo

Arbana Sahiti
University of Prishtina, Republic of Kosovo

Rina Zeqiri
University of Prishtina, Republic of Kosovo


The purpose of this research is to analyse the determinants of foreign direct investment (FDI) in Kosovo via extensive review of existing research studies, and via the development of a multiple regression model for identifying key determinants of FDI in Kosovo from 2005 to 2018. Ordinary Least Square (OLS) is the main method used to identify statistically significant determinants of FDI in Kosovo, and the importance of these determinants. Potential FDI determinants are tested at the 5% level of statistical significance. The empirical results find that corporate tax rate, wages, GDP growth rate and interest rates are the determining factors in attracting FDI to Kosovo.

Keywords: foreign direct investment; determinants; OLS model

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