Is the albanian economic growth influenced by importing countries growth?

Abstract

International trade, as a major factor of openness, has a significant contribution to economic growth, especially nowadays when globalization is becoming a widespread phenomenon. Country’s trade openness can be analyzed from one side by the impact of our revenue growth, which will influence the growth of domestic demand for imported goods and from the other side the revenue growth of other countries which will affect the growth of imported goods and thus in the growth of exports of analyzing country. Exports impact is very important to be treated combined with exchange rate, as another indicator of international competitiveness of countries goods. This paper will analyze the impact of economic growth of importing countries and effective exchange rate to the domestic economy growth, in our case to the Albanian economy. The increase demand for imported goods from Albanian trade exchange countries means an increase in our exports, thus an increase in aggregated demand and so in a higher economic growth. The exchange rate makes our goods more or less comparable in international market, as a result it will take a significant part on analyze. The goal of the paper is to investigate the impact of exports, other counties economic growth and exchange rate to economic growth of Albania. In the model are included a weighted index of other countries economic growth based on the imports that they make from Albania and the effective exchange rates as a variable of competiveness. The results are based on annual data collected from 2000 to 2013. The empirical results indicate that exist a positive correlation of importing countries from Albania and effective exchange rate in Albania’s economic growth.