International Trade of Albania. Gravity Model

Abstract

Today we live in a world where such economic globalization and technological developments have created many advantages but also shortcomings regarding social and economic development of different countries of the world. Since the beginning of the transition until the trade regime now, our country has undergone profound changes. Therefore, the aim of this paper is to see the major development steps of international trade in Albania over the years and look at the key factors that have contributed to it. The paper provides some theoretical and empirical considerations regarding trade development with the focus on export-imports in our country in relation to the Free Trade Agreements, as these have affected Albania's international trade. Specifically, it offers an application of the Gravity Model of Trade for Albanian case in relation to its 27 export/import countries. The findings from the model application result in stable trade flows for Albania.