The Ease of Doing Business in Albania Compared with Countries of the Region

Proceedings of The 9th International Conference on New Ideas in Management, Economics and Accounting

Year: 2021


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The Ease of Doing Business in Albania Compared with Countries of the Region

Shpresa Çela, Fiona Shehi, Brendon Duli



Ease of doing business is an important financial metric for the economy of every country. This study analyzes the ease of doing business in Albania. Based on reports and publications by the World Bank for the year 2019, Albania ranks 63rd of 190 different countries in the world included in the rankings. Even when comparing to countries in the region, Albania still ranks behind in the classification. For example, North Macedonia falls in rank 10, Slovenia in rank 40, Kosovo in rank 44, and Serbia in rank 48. This is a point of concern for our country when considering the plentiful natural resources, strategic geographical position, and the young age of the population, a set of significant advantages which should positively affect the number of new businesses in Albania as compared to regional counterparts. For this reason, we have determined a set of variables which impact the ease of doing business metric. There are 10 distinct variables, also supported by the World Bank, which influence a country’s ease of doing business. In summary, the variables relevant to this study that provide clarity into the financial analyses include number of new businesses, startup costs, and variety of taxes. Using a multi-factorial linear econometric model, we have analyzed these variables as well as the impacts they have on the ease of doing business considering only Albania and North Macedonia. In particular, we determine which of these factors lead to more favorable ease of doing business in North Macedonia, ultimately resulting in increased foreign investments.

keywords: The ease of doing business, number of new businesses, types of taxes, panel data analysis.