The role of foreign direct investments in the developing of banking sector

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Abstract

The important factor of a stable economy undoubtedly remains foreign direct investment (FDI), which helps in the establishment and economic, social and overall development of a country. Corporations that decide to invest their capital abroad of the country of origin, obviously require the destination country to have an organizational economic viability and attractive and suitable legal space. Meanwhile, the factors that affect the size, structure, benefits, costs and role of the banking sector of FDI in the economy of Kosovo will be objects of analysis of this paper. In addition to these issues, we will present the real situation of FDI in general during the last years in Kosovo, the origin of the respective countries from which these investments come and their economic activity scope. For the writing of this paper, the method of secondary data analysis and comparative method were used. Mainly, we have used the publications of the Central Bank of Kosovo (CBK), such as Financial Stability Reports and Monthly Information Reports of the Financial System. In this paper, it is concluded that FDI makes the main contribution to the development of the banking sector in Kosovo as well as in developing countries.

Keywords: Banking Sector, Capital, Foreign Direct Investment, Assets

Authors’ individual contribution: Conceptualization — E.B. and B.S.; Methodology — A.R.H. and M.H.; Investigation — B.S.; Resources — E.B. and A.R.H.; Writing — Original Draft — E.B. and B.S.; Writing — Review & Editing — E.B., A.R.H., and M.H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G32, F21

Received: 19.02.2023
Accepted: 17.01.2024
Published online: 19.01.2024

How to cite this paper: Bajçinca, E., Hajdini, A. R., Shala, B., & Hashani, M. (2024). The role of foreign direct investments in the developing of banking sector. Journal of Governance & Regulation, 13(1), 111–122. https://doi.org/10.22495/jgrv13i1art10