International Journal of Economics, Commerce and Management United Kingdom Vol. V, Issue 4, April 2017 Licensed under Creative Common Page 485 http://ijecm.co.uk/ ISSN 2348 0386 ASSESSMENT OF BUSINESS CLIMATE IN THE AGRICULTURAL SECTOR OF ALBANIA USING ECONOMETRIC MODELLING Mira Andoni Professional Academy of Business, Tirana, Albania miraandoni@yahoo.com Myslym Osmani Agricultural University of Tirana, Tirana, Albania mosmani@ubt.edu.al Abstract Business climate, in agriculture as elsewhere, is of special importance, for investments to increase and for the growth of agriculture sector. In our research we postulate, based on theoretical background and our experience, a number of factors that influence on the business climate quality in agriculture. Further, based on empirical ground evidence from the farming sector in the commune of Korça, we try to test our hypothesis. We use statistical methods and econometric models to identify the most relevant factors that actually contribute to the business climate in the agricultural sector of Albania. Among them we identified political instability, unfair competition in the trade of agricultural commodities, poor rural infrastructure, poor irrigation and draining system, lack of cooperation among farmers and along the value chain, and unsafe property rights. We urge government to address these issues, as ways to improve the quality of business climate and insure better investment in the sector. Keywords: Investment climate, variables of investment climate, multinomial econometric model, agriculture sector, Albania