The impact of Scandinavian economies on Estonia via foreign trade and direct investments
AbstractThe paper focuses on the benefits, challenges and risks of the Estonian economy stemming from close relations with its main foreign partners Finland and Sweden, through foreign direct investments and foreign trade. The paper gives a short overview of Finnish and Swedish economies to provide a background for the analysis of the characteristics of FDI and trade flows between Estonia and these countries. As Estonia is a very small and open economy main benefits and challenges are related to it. The authors find that FDI from Finland and Sweden increase the credibility of Estonian economy, but as foreign investment flows are subject to push factors they have the potential of destabilising capital flows, because these two countries make over 70% of FDI into Estonia. The authors also find that the dynamics of Estonian exports to Finland and Sweden (which make more than half of total exports) is generally determined by the demand factors of those countries.
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Bibliographic InfoPaper provided by Bank of Estonia in its series Bank of Estonia Working Papers with number 2002-4.
Length: 27 pages
Date of creation: 10 Nov 2002
Date of revision: 12 Nov 2002
Publication status: published
Postal: Estonia bld. 13, 15095 Tallinn, ESTONIA
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-25 (All new papers)
- NEP-FMK-2005-07-25 (Financial Markets)
- NEP-INT-2005-07-25 (International Trade)
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