A STUDY ON MACROECONOMIC DETERMINANTS OF FOREIGN DIRECT INVESTMENT

Foreign Direct Investment (FDI) plays an important role in advancing the development and economic growth of a country. Due to the shortage of capital developing countries heavily depend on foreign direct investment as a source to boost their economy. The potent growth performances experienced by Turkey and Albania economies greatly depends on the FDI. The purpose of this study is to evaluate the factors affecting Foreign Direct Investment in Turkey and Albania from 2001 to 2019. In this study the regression model is used to measure the effects of macroeconomic factors on FDI. This study considers macroeconomic factors like gross domestic product exports imports inflation and exchange rate. Data of the study have been collected from the state bank of Turkey and Albania. The results show that there is a significant and positive effect of inflation exports and exchange rate factors on Turkey’s FDI. Also there is a significant and positive effect of GDP and export factors on Albania’s foreign direct investment.