FDI in small accession countries: the Baltic states
AbstractAnalysing the evolution and determinants of foreign direct investment (FDI) in Estonia, Latvia and Lithuania, this paper argues that sound economic policies have created an environment conducive for FDI. Overall, FDI has contributed to economic growth in the Baltic economies, having financed around one-fifth of fixed investment. However, their small size makes the Baltic countries relatively less attractive for market-seeking FDI in manufacturing. Moreover, at the outset of transition, their economies were dominated by relatively uncompetitive low-technology industries, which made them less interesting for manufacturing-based export-oriented FDI. Thus, FDI largely went to relatively low-technology sectors, such as wood processing and food, and it has not helped radically transform the structure of the manufacturing sector. A major part of FDI went into services, including banking and telecommunication, contributing to increasing efficiency in the whole economy.
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Bibliographic InfoPaper provided by European Investment Bank, Economics Department in its series EIB Papers with number 9/2004.
Length: 24 pages
Date of creation: 18 Jun 2004
Date of revision:
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Estonia; Latvia; Lithuania; Baltic states; Foreign direct investment;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
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.:
- Urmas Varblane & Tonu Roolaht & Ele Reiljan & Rein Juriado, 2001. "Estonian Outward Foreign Direct Investments," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 9, Faculty of Economics and Business Administration, University of Tartu (Estonia).
- Rajneesh Narula & John Dunning, 2000. "Industrial Development, Globalization and Multinational Enterprises: New Realities for Developing Countries," Oxford Development Studies, Taylor and Francis Journals, vol. 28(2), pages 141-167.
- Zhang, Kevin Honglin & Markusen, James R., 1999.
"Vertical multinationals and host-country characteristics,"
Journal of Development Economics,
Elsevier, vol. 59(2), pages 233-252, August.
- Kevin H. Zhang & James R. Markusen, 1997. "Vertical Multinationals and Host-Country Characteristics," NBER Working Papers 6203, National Bureau of Economic Research, Inc.
- World Bank, 2005. "Lithuania : Investment Climate Assessment," World Bank Other Operational Studies 8568, The World Bank.
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