The 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.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)