Business Environment and Foreign Direct Investment in Kosovo: an Overview of the Relationship Between Institutional Reforms and FDI

Hykmete Bajrami () and Lulzim Krasniqi ()
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Hykmete Bajrami: University of Prishtina, Faculty of Economics, Prishtina, Kosovo
Lulzim Krasniqi: South East European University, PhD Candidate, Tetove, North Macedonia

Economic Research Guardian, 2019, vol. 9, issue 2, 99-108

Abstract: This paper analyses factors outlining the doing business environment, with reference to Kosovo, by focusing on some of the main determinants of attracting Foreign Direct Investments (FDI). It accentuates that in order to create favorable conditions to increase the flux of FDI, transition countries, including Kosovo, need to conduct a wide range of structural reforms, related not only to the reform of portfolios directly related to economy, but also to the improvement of the legal system and functioning of the democratic system in general. The paper used literature review and analysis of set of reforms undertaken from Kosovo institutions in order to attract FDI and improve the business environment. Moreover, the paper elaborates some of the important factors defining the doing business environment. There is a wide consensus in terms of recognizing the role of FDI for transition economies. Kosovo recognizes the significance of FDI and their impact on country economic development. For this purpose, its institutions have undertaken a range of reforms in terms of improving doing business environment. It is accentuated that Kosovo has many preconditions for increasing FDI inflows thanks to its natural resources, human capital, free access to major markets etc. However, apart from progress made in improving the doing business environment, Kosovo faces numerous challenges related not only to structural reforms of resources directly related to economy, but also with improving legal system and better functioning of the democratic system in general.

Keywords: Business environment; Foreign Direct Investment; Structural reforms (search for similar items in EconPapers)
JEL-codes: O13 P48 Q28 Q56 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:9:y:2019:i:2:p:99-108

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