The impact of international transactions on the Balance of Payments in Kosovo: Econometric Analysis

Abstract

The main purpose of this paper is to analyze the influence of the factors of international transport of services as it is, Total te Exportit te sherbimeve (TEXS), Transport and storage (TS), Flight of passengers by plane (FPP), Bus trips outside the country (BTOC), Other Export Services (OEXS) ne  Bilancit e Pagesave (BoP). The factors of international transport of services are considered as carriers of many economic activities and help in the development of production, Nayyar, et al. (2021). To analyze these factors, secondary data from the Central Bank of Kosovo were used (BQK, 2023). The Ordinary Leat Squares (OLS) model, Simple Linear Regression, Multiple Regression, Pearson correlation, and Heteroskedasticity and Normality tests were used to present the results of the study. The results of the OLS Model through Multiple Regression, we find that the model is statistically significant of 0.0002, R2 = 0.99 represents a very strong relationship between (BoP) and independent variables. The variables of the study, (TEXS), (TEXS) and (BTOC) have no influence on (BoP) and are statistically not significant. Meanwhile, the variables (TS), (FPP) have a positive impact on the Balance of Payments in Kosovo (BoP). The Pearson correlation between TS and (TEXS) is high R2 = 0.73 and statistically significant sig. 0.01, (BTOC) has a strong relationship R2 = 0.78 and statistically significant sig.0.04 with (TEXS). The variable (OEXS) has a strong and significant relationship with the TEXS variable. It has an R2 = 0.98; p = 0.000. Finally, OEXS has a strong R2 = 0.98 and statistically significant 0.000 correlation with TPPO. From the study, it is concluded that with the liberalization of visas in Kosovo and by giving priority to the improvement of the infrastructure of some of the factors of international transport of services, the income will increase, contributing to the Balance of Payments and the economic development of the country.