Journal of Business & Economic Policy

ISSN 2375-0766 (Print), 2375-0774 (Online) DOI: 10.30845/jbep

The Impact of FDI portfolio in the implementation of Local Economic Development Strategy-The Evidence from Municipality of Prishtina
Sokol Krasniqi, ErëzaArifi, Enver H. Krasniqi

Rapid economic growth in few of the developing countries has had an impact in the changes in the global network of investment. This includes also Foreign Direct Investments, as an integral part of the development of any country. One of the economic problems of undeveloped countries and Kosovo is that they do not have enough national savings to finance their investments. They are in constant need of foreign capital in forms of both direct and indirect investments. Foreign Direct Investments in general bring national economic benefits, while at the same time, through invested capital, it will increase the Gross Domestic Product (GDP), and in particular it will contribute to the lowering of the unemployment in the country. Thus, Foreign Direct Investments (FDI) are assumed to benefit for poor country like Kosovo, not only by supplementing domestic investment, but also in terms of economic development, new employment, transfer of technology, increased competition, networking and other positive externalities. In this manner, key determinant and a prerequisite for FDI attraction in a country, including Kosovo, must have if there is an interest to attract the right mode of foreign capital. Having in mind the current conditions, FDIs should play a key role in the economic development through restructuring and growing the national economic competitiveness. By bringing resources like added capital, technological and managerial “know-how”, and access to local, regional and global markets, FDI will increase productivity and increase the export. The study investigate the investment possibilities with their investment in municipality projects and which steps needed to be undertaken from institutions in order to create attract the right mode of foreign capital. The study found a high degree of importance and prioritization of FDI (prior and after investment decision) in increasing budget capacity for implementation development strategy in Municipality of Pristina. The findings also revealed “corruption”, “small market size” and “political instability” as major barriers to increasing the investments in the country.

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