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FDI in the post-EU accession Baltic Sea Region: A global or a regional concern?

Author

Listed:
  • H. Richard Nakamura

    () (Centre for Baltic and East European Studies (CBEES), Södertörn University)

  • Mikael Olsson

    (Centre for Baltic and East European Studies (CBEES), Södertörn University)

  • Mikael Lönnborg

    (Centre for Baltic and East European Studies (CBEES), Södertörn University)

Abstract

This paper investigates the dynamics of FDIs in the Baltic Sea Region (BSR) by applying the Poisson Pseudo-Maximum Likelihood estimation method on a gravity model. In particular, we analyze the influence of macro and spatial factors on investment stock changes and discuss whether the origin of these investments and the 2004 EU enlargement have had any effects on BSR FDIs. Our results suggest that EU enlargement has been significant for FDI activity in the region, and that FDI is basically a regional issue as it tends to be bilateral within the region. However, the same results also suggest that geographic distance is not a significant factor. We conclude that while being traditional in nature, the BSR FDI pattern is undergoing changes towards a lesser degree of geographic bias.

Suggested Citation

  • H. Richard Nakamura & Mikael Olsson & Mikael Lönnborg, 2012. "FDI in the post-EU accession Baltic Sea Region: A global or a regional concern?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(2), pages 89-108, December.
  • Handle: RePEc:bic:journl:v:12:y:2012:i:2:p:89-108
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    References listed on IDEAS

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    1. Tiiu Paas, 2000. "The gravity approach for modeling international trade patterns for economies in transition," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 633-648, November.
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    4. Miroslav N. Jovanović, 2006. "The Economics of International Integration," Books, Edward Elgar Publishing, number 3750.
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    More about this item

    Keywords

    Baltic Sea Region; FDI; trade; gravity model; poisson pseudo-maximum likelihood method.;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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