The Role of External Resources in Kosovo's Economic Growth: An Econometric Analysis

Nurbay Sey

doi:10.5281/zenodo.14427726

Authors

Nurbay Sey Bolu Abant Izzet Baysal University https://orcid.org/0000-0003-4125-8297

DOI:

https://doi.org/10.5281/zenodo.14427726

Keywords:

Kosovo Economy, Foreign Direct Investment, Economic Growth, Exports, VAR Analysis

Abstract

This study addresses the importance of external resources for Kosovo's economic development. Given that Kosovo lacks sufficient industrial infrastructure, the role of foreign direct investments, exports, and remittances in overcoming capital shortages is examined. In this context, an empirical analysis of the role of external resources in GDP per capita is conducted using quarterly data from the period between Q1 2012 and Q2 2024. In this study, which utilizes VAR analysis, GDP per capita, foreign direct investments, exports, and remittances are the key variables. The results of the tests indicate that remittances are the most significant determinant of GDP in Kosovo, while foreign direct investments and exports do not have a long-term impact on Kosovo's economic growth. Additionally, the study found that GDP is an important determinant of foreign direct investments, and that increasing remittances also boosts exports.

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