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Technology-intensive Foreign Investments and Economic Development Strategy in a Small Country


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  • Marek Tiits

    (Institute of Baltic Studies)

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    The EU Lisbon objective to increase the R&D investments to 3% of the GDP by 2010 cannot be achieved in a small country by simply increasing the public sector appropriations for R&D investments. The experience of Ireland and Singapore as well as various Central European transition countries shows that introduction of a proactive foreign investment strategy, closely coordinated with education, research, employment and other policies, is in a small country one of the most influential and virtually the only possibility for a radical increase of the knowledge intensity of the economy. An updated version of this working paper appeared in 2007 in TRAMES Journal of Social Sciences and Humanities. The original working paper is available from the author on request.

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    File Function: Revised version for TRAMES, 2007
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    Bibliographic Info

    Paper provided by Institute of Baltic Studies in its series Working Papers with number 01-2005.

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    Length: 19 pages
    Date of creation: 22 Oct 2005
    Date of revision:
    Handle: RePEc:ibs:wpaper:01-2005

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    Keywords: Foreign direct investment; public policy; innovation policy; small countries;

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    1. Stefan de Vylder, 1996. "The Rise and Fall of the "Swedish Model"," Human Development Occasional Papers (1992-2007) HDOCPA-1996-04, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    2. David A Dyker, 2004. "Closing the productivity gap between eastern and western Europe: The role of foreign direct investment," Science and Public Policy, Oxford University Press, vol. 31(4), pages 279-287, August.
    3. Lundvall, Bengt-Ake & Johnson, Bjorn & Andersen, Esben Sloth & Dalum, Bent, 2002. "National systems of production, innovation and competence building," Research Policy, Elsevier, vol. 31(2), pages 213-231, February.
    4. Freeman, Chris, 2002. "Continental, national and sub-national innovation systems--complementarity and economic growth," Research Policy, Elsevier, vol. 31(2), pages 191-211, February.
    5. Aurora Galego & Carlos Vieira & Isabel Vieira, 2004. "The CEEC as FDI Attractors: A Menace to the EU Periphery?," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 40(5), pages 74-91, September.
    6. Marek Tiits & Rainer Kattel & Tarmo Kalvet, 2006. "Made in Estonia," Books, Institute of Baltic Studies, edition 1, number 1, Spring.
    7. Moses Abramovitz, 1956. "Resource and Output Trends in the United States Since 1870," NBER Books, National Bureau of Economic Research, Inc, number abra56-1, octubre-d.
    8. Marek Tiits, 2006. "Industrial and trade dynamics in the Baltic Sea region - the last two waves of European Union enlargement from a historic perspective," Working Papers 01-2006, Institute of Baltic Studies.
    9. Ernst, Dieter & Kim, Linsu, 2002. "Global production networks, knowledge diffusion, and local capability formation," Research Policy, Elsevier, vol. 31(8-9), pages 1417-1429, December.
    10. Tom O'Connor, 2001. "Foreign Direct Investment and Indigenous Industry in Ireland: Review of Evidence," One Europe or Several? Working Papers 22, One-Europe Programme.
    11. Briguglio, Lino Pascal, 1998. "Small Country Size and Returns to Scale in Manufacturing," World Development, Elsevier, vol. 26(3), pages 507-515, March.
    12. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
    13. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
    14. Moses Abramovitz, 1956. "Resource and Output Trends in the United States Since 1870," NBER Chapters, in: Resource and Output Trends in the United States Since 1870, pages 1-23 National Bureau of Economic Research, Inc.
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