IDEAS home Printed from https://ideas.repec.org/h/spr/prbchp/978-3-319-70377-0_5.html
   My bibliography  Save this book chapter

The Impact of Scandinavian Inward Foreign Direct Investment on the Baltic States

In: Economy, Finance and Business in Southeastern and Central Europe

Author

Listed:
  • Agnė Šimelytė

    (Vilnius Gediminas Technical University)

  • Aušra Liučvaitienė

    (Vilnius Gediminas Technical University
    University of Applied Sciences)

Abstract

Although foreign direct investment (hereinafter FDI) has been the matter of discussion since the early 1970s, it is still one of the most controversial topics in both economic and political terms. The intensity of FDI shows the host country’s openness to the foreign capital, its integration into the international market and economic growth. The proponents of the positive attitude state that foreign capital increases competitiveness and labour productivity in the host country and creates new jobs and the host country adopts new technologies. Other scientists are not so optimistic in respect of FDI impact. Inward FDI may be determined by political decisions of the host government. However, some researchers even point out that stimulation of FDI is harmful for the host economy. FDI promotion is acceptable if indirect initiatives are adopted and an appropriate legal system for controlling multinational corporations’ (hereinafter MNCs) activities exists. It is noticeable that the main negative consequence of activating inward FDI stimulation is that the host economy becomes dependent on a foreign capital over a certain period of time and MNCs have effect on decisions of the host government. Some studies show that the mobility of foreign capital may exist under an imperfect market conditions only. MNCs are likely to invest into economically weak countries benefiting from a low labour cost. Thus, under the present economic conditions, it is important to identify the benefits of FDI for the host country and to analyse MNC motives for investment. The article investigates the importance of foreign direct investment in the country, its role in economic development and promotion peculiarities. The authors examine the problems, which exist in attracting FDI. The object of research is the role of Scandinavian capital in the Baltic States. The aim of research is to measure the impact of Scandinavian foreign direct investment on the development of the Baltic States. The final results reveal that the Baltic States are dependent on foreign capital. These countries are characterised by favourable business environment, good geopolitical situation and infrastructure and scientific-technological potential. This proves that the Baltic States are attractive for MNCs, which tend to invest in R&D. The research indicates that the Baltic States compete for FDI, especially for investors from Scandinavia.

Suggested Citation

  • Agnė Šimelytė & Aušra Liučvaitienė, 2018. "The Impact of Scandinavian Inward Foreign Direct Investment on the Baltic States," Springer Proceedings in Business and Economics, in: Anastasios Karasavvoglou & Srećko Goić & Persefoni Polychronidou & Pavlos Delias (ed.), Economy, Finance and Business in Southeastern and Central Europe, pages 69-81, Springer.
    • Handle: RePEc:spr:prbchp:978-3-319-70377-0_5
    DOI: 10.1007/978-3-319-70377-0_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:prbchp:978-3-319-70377-0_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.