Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204079
Authors: 
Hunya, Gabor
Year of Publication: 
2004
Series/Report no.: 
wiiw Research Report 307
Abstract: 
Analysing 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 telecommunications, contributing to increasing efficiency in the whole economy.
JEL: 
F21
P33
O24
O52
Document Type: 
Research Report

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