Approach of Investment Firms in Albania

During December 2011 – January 2012, a survey on the market situation and foreign firms’ opinion was carried out related the several influencing factors on the firms’ decision to invest. The factors surveyed were the labour force, technology, capital, legal aspect and political stability, tax structure, land access, investing environment, various regulations, etc. These factors are rated according a scale of importance of 1-5, from the less important to very important. The same factors are analysed comparing the firms’ experience with their expectations before investing, as an indicator of market study. In addition, firms are asked about their involvement in research and development, market research for the future, increase or decrease of turnover and market share, expectations for the next two years, as well as the descriptive information on their legal form, firm activity, nationality of the mother company, year of establishment in Albania, etc. The purpose of this questionnaire is to have a clear view of the effects that such factors have on the decision-making of foreign firms which have some experience in the Albanian market. 1. Results of Influencing Factors on Current Foreign Investors in Albania About 60 firms of foreign capital were questioned on their perceptions, according to their experience, about business environment and how different conditions affect the company’s activity and plans. This survey was carried out from AIDA1, under the direction of UNCTAD and in close collaboration with the Foreign Investors Association in Albania (FIAA) and UNDP. Throughout the work with the questionnaire, some inputs with missing values are used. Different categorizations were used, where possible, For example, in the first part of the questionnaire (Part A) on the business environment and factors influencing the company’s plans to invest, the scales 1-5 are used where for the purposes of this analysis they are regrouped in 3. For the Part B of the questionnaire different scales have been used depending on the questions. To reveal the effects that several factors have on the firm’s decisions on the future are taken into consideration the descriptive and regressive analysis. All estimations are carried out by means of SPSS. 2. Regressive Analysis of Influencing Effect on the Firm’s Development 2.1 Dependent variables The dependent variables taken into consideration are: the number of employees in 2012 compared to 2010, encoded 1 and 0 and the market share in 2010 compared to 2008 to check the influencing effect that several category variables have upon them. The regression binary is used encoded in 1 increased and 0 low or unchangeable, and “0” is used as a reference category. 2.2 Independent variables (explanatory variables) Some independent variables are taken into consideration, but in the end only the variables resulting statistically important have been considered, leaving outside the variables that correlate with several others. The independent variables taken into consideration are: the numberof employees in2010 compared to 2008, labour cost, information technology, government and public integrity, (lack of corruption), reasonable taxes, land access, low level of bureaucracy, interaction with authorities, ease of company registration and start-up, monitoring of market for development opportunities, existence of a strategic plan for its development in the future, year of establishment, part of foreign ownership, number of the employees compared to 2008, turnover and market share compared to 2008 and 1 The questionnaire was developed by AIDA. The processing of data generated by the questionnaire and the results are individual work of the author.


Results of Influencing Factors on Current Foreign Investors in Albania
About 60 firms of foreign capital were questioned on their perceptions, according to their experience, about business environment and how different conditions affect the company's activity and plans.This survey was carried out from AIDA1 , under the direction of UNCTAD and in close collaboration with the Foreign Investors Association in Albania (FIAA) and UNDP.
Throughout the work with the questionnaire, some inputs with missing values are used.Different categorizations were used, where possible, For example, in the first part of the questionnaire (Part A) on the business environment and factors influencing the company's plans to invest, the scales 1-5 are used where for the purposes of this analysis they are regrouped in 3.For the Part B of the questionnaire different scales have been used depending on the questions.
To reveal the effects that several factors have on the firm's decisions on the future are taken into consideration the descriptive and regressive analysis.All estimations are carried out by means of SPSS.

Dependent variables
The dependent variables taken into consideration are: the number of employees in 2012 compared to 2010, encoded 1 and 0 and the market share in 2010 compared to 2008 to check the influencing effect that several category variables have upon them.The regression binary is used encoded in 1 increased and 0 low or unchangeable, and "0" is used as a reference category.

Independent variables (explanatory variables)
Some independent variables are taken into consideration, but in the end only the variables resulting statistically important have been considered, leaving outside the variables that correlate with several others.
The independent variables taken into consideration are: the numberof employees in2010 compared to 2008, labour cost, information technology, government and public integrity, (lack of corruption), reasonable taxes, land access, low level of bureaucracy, interaction with authorities, ease of company registration and start-up, monitoring of market for development opportunities, existence of a strategic plan for its development in the future, year of establishment, part of foreign ownership, number of the employees compared to 2008, turnover and market share compared to 2008 andISSN 2039-9340 (print) Mediterranean Journal of Social Sciences MCSER Publishing, Rome-Italy Vol 5 No 6 April 2014 forecast for the number of employees in 2012 compared to 2010.
Firms are constantly involved in advertisement campaigns and they follow the company's development strategy.A large number of companies (52.54%) have a clear strategic plan for the future of at least the next 1-3 years.In 69% of them, the market share they possess has increased from 2008 to 2010.Most of the firms have a strategic plan for the future (about 83%).80% of the firms, who have increased their market share, have also increased the turnover in 2010 compared to 2008.There is a statistically important correlation of 1% between the turnover and the market share about level.More than half of the firms are thinking to increase the number of employees in 2012 compared to 2010.
The increase of market share from 2008 to 2010 is statistically influenced by the increase of turnover, the strategic plan for the future and the forecast to increase the number of employees in the two upcoming years.85% of the firms, who experienced an increase of the market share in 2010 compared to 2008, have a strategic plan for the future.However, even among those firms, whose market share has not changed, or has decreased, do have a strategic plan for the future.
Among the firms, whose market share has decreased or is unchanged, more than half have the same turnover trend, while among the firms, whose market share has increased from 2008 to 2010, 80% of them have achieved to increase the turnover, thus this correlation is statistically important at 1% (chi-square = 11.966 and p-value=0.001).More than half of the firms expect to increase the number of employees in the future when most of them have experienced an increase of the market share (62.5%).There is a statistically important correlation between the forecast to increase the number of employees and the increase of the market share, however it is not in high levels.Here we can mention the labour cost or the clarity or accuracy of laws and regulations as factors which have an impact.
The increase of number of employees in 2010 is statistically important correlated with the existence of a strategic plan for the future development (at the level 1%), the increased market share in 2010 compared to 2008 (p <10% ), the forecast for the number of employees in the next two years (p <1%), future expansion or development (p <10%).In addition, if we analyse the trend or the forecast to increase the number of employees from 2012 to 2010, we can see that the majority of firms have a strategic plan for the future.The increase of the number of employees and the firm's forecastfor expansion or development is statistically closely correlated (p-value = 0.001).In the first part of the questionnaire, we have taken into consideration the variables influencing as categorical factors on the firms decision to invest or the factors which the firm has forecasted and then they are compared to what we find at the moment that they come to invest in Albania.About half of the firms have the same experience with what they have forecasted about the financial availability.About 1/3 of the firms said that the market share has increased and have the same opinion on the financial availability.Between to variables there is a statistically important correlation at the p-value<10%.About 81%of firms see labour cost as an important factor influencing the firms' decision to invest.Between the labour cost and the increase of the number of employees there is a statistically important correlation (p=0.055) and also with the market share (p-value = 0.081).ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences MCSER Publishing, Rome-Italy Vol 5 No 6 April 2014 The increase of the number of employees is considerably correlated with the forecastabout the information technology and linguistic skills (p-value<10%), also with the forecast about the availability of qualified labour (p-value<5%).The variable about the increase of the market share is statistically correlated with the information or skills forecast (p-value<10%).Several factors, such as legal aspect or governance, influence on the increase of the market share or increase of the number of employees.ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences Factors such as land access, the forecast about this factor, ability to own land with clear ownership title, security of industrial parks, ease to find a job and stay permit are all influencing on the investment environment.

Legal aspect
The majority (55.9%)consider access to land as a really important factor influencing on the opportunity to invest.This factor is closely correlated with the increase of the number of employees (p-value=0.054).

Analysis of Influencing Factors on the Increase of the Number of Employees in 2012 Compared to 2010
The number of employees in 2012 compared to 2010 has been used asa dependent variable.There is used binary logistic regression while as reference categories are: the number has decreasedor is unchanged, while the category ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences MCSER Publishing, Rome-Italy Vol 5 No 6 April 2014 under study is the increase ofnumberof employees.
While as independent or influencingvariables are taken several variables related with the number of employees, market share, foreign ownership shareas well as factors related with the legal and government aspect.The variables for regression effect are encoded into two categories.The variables not important have been omitted by the study.
The increase ofnumberof employeesin the two upcoming years is affected 31 times from the increase in thenumberof employees on the year for which the firms have responded, which is statistically important (p-value <0.01).Similarly, theincrease in the market share has a great influence in theincrease of theemployees' number at about 31 times which also statistically important (p-value <0.05).The possibility to own land as an important factor influencing on invest affect negatively on the increase of the numberof employees (p-value<5%) and there are 0.04 times less chances to increase the number of employees.
a. Binary logisticregressionwhere the dependent variable: No.of employees in2012 compared to 2010has two categories 1-increased and 0-Decreased/unchanged.Decreased/unchangedis a reference category.b.Reference category c.Binary logistic regression; +p<0.10;*p<0.05;**p<0.01;and ***p<0.001The firms established after 2000 have more possibility to increase the number of employees in the next 2 years (pvalue <10%).The financing availabilityas an important factor influencing on the firms decision-making affect about 0.144 times less on the firms decisions to increase the number of employees (p-value <10%).The legal aspect or others related to the legislative aspects are very much important for the increase of thenumberof the firms' employees.The interaction

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No. of employees in 2012 compared to 2010

Table 2 :
No.of employees in 2012 compared to 2010 Chi-square test was performed to examine whether or not method use significantly varies between categories of eachISSN 2039-9340 (print)

Table 3 :
No.of employees in2012 compared to 2010

Table 4 :
No.of employees in2012 compared to 2010

Table 5 :
No. of employees in 2012 compared to 2010