A legal framework for foreign direct investment: A case of an emerging market

Abstract

There is unbridled competition among countries to attract foreign direct investments (Sethi et al., 2003). Developing countries are continuously revising their legal framework and policies to prevail in such a dynamic environment. The legal framework for foreign direct investment (FDI) in Kosovo since the establishment of temporary institutions until today has undergone constant changes and amendments to persuade foreign investors for investment purposes. The efforts to address issues raised by investors have played a pivotal role by shaping the legal environment in such ways in order to lure foreign investors. The main purpose of this study is to assess the legal framework in Kosovo by comparing the post-war and post-independence periods. This study adapts qualitative methodology and uses secondary data. The research concludes that although the legal changes were aimed at attracting foreign investors, this goal is still not being realized successfully. The findings of this research are very relevant because they can greatly contribute to other countries by learning the right lessons from Kosovo’s experience that can be used for other emerging markets.