This study develops a panel data analysis over 27 transition and post transition economies for the period 2003-2010. Its intent is to investigate empirically the true effect of seven variables into foreign flows and takes later on the advantage of observed findings to conduct a comparative analysis between Kosovo and regional countries such: Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia. As the breakdown period (2008-2010) was included in the data set used to modelling the behaviour of FDI, both Chow test and the time dummies technique suggest the presence of structural break. Ultimately, empirical results show that FDI is positively related with one year lagged effect of real GDP growth, trade openness, labour force, low level of wages proxied by remittances, real interest rate and the low level of corruption. Besides, the corporate income tax is found to be significant and inversely related with foreign flows. The comparative analysis referring the growth rate of real GDP shows that Kosovo has the most stable macroeconomic environment in the region, but still it is continuously confronted by the high deficit of trade balance and high rate of unemployment. Appart, the key obstacle that has abolished efforts for foreign investment attraction is found to be the trade blockade of...

The EU has taken a major role in The Republic of Kosovo, creating a new future for the country via the EU office in Kosovo with its role in implementing EU norms in Kosovo. Kosovo is a potential candidate state for the EU and has declared its interest in becoming an EU member state.  Kosovo has implemented crucial reforms and shows commitment to advancing on its European path. Kosovo does not fulfil the general requirements for the accession based on the Copenhagen criteria yet, and there remain major internal and external hindrances to its membership. The rule of law, despite the progress made in adapting the legal framework, Kosovo needs to step up its efforts to strengthen the independence of the judiciary. Additionally, Kosovo must fight corrupted structures and organised crime by building strong and independent institutions. Furthermore, reforms in the economic area are needed to tackle Kosovo's informal economy and unemployment. Despite, the Copenhagen Criteria, the main hindrances are the five non-recognizers in the EU and the required normalization process with Serbia. Kosovo must get its independence recognized by the five non-recognizers in the EU and stabilize its relations with Serbia before focusing on the accession to the EU.

Zugl.: Neubiberg, Universiẗat der Bundeswehr München, Diss., 2005.