FDI, technology & knowledge transfer from Nordic to Baltic countries

Abstract

The purpose of this study is to examine the intensity of technology and knowledge transfer to the selected Baltic countries through foreign direct investment. The intensity of technology and knowledge transfer across the Baltic countries varies widely, with Estonia showing the leading position in the Baltic region. The amount of foreign direct investment in three countries is linked with the level of technology and knowledge transfer. It is indicated that during the Financial Crisis in 2008, the extent of foreign direct ownership changed in all three countries and later recovered. In the aftermath of this disruption, countries recovered their stock Foreign direct investment attraction rates and almost reached their 2004 level. Latvia has achieved a 50 per cent increase among Baltic countries, benefiting from it. Foreign direct investment and technology transfer increased through effective strategies and policies. In contrast, Estonia maintains a sustained stock foreign direct investment and has moderately lower margins than in other Baltic countries. Among countries, Estonia is the dominant stock FDI absorber in the Baltic region and have made significant contributions in the region.

Impact of Foreign Direct Investment on Host Country’s Development: A Case Study

“…FDI can contribute to developing export-oriented industries. Foreign investors have often created global networks and distribution channels that allow the local industry to export its products more efficiently (Villar et al, 2020;Burinskas et al, 2021). FDI is a critical factor in a country's export activity, providing the resources, know-how, and market access necessary to promote economic growth and stability.…”

Review of studies on FDI: The case of Baltic States

“…Runiewicz (2004) investigates FDI, technology flows and innovativeness in the Baltics. Burinskas et al (2021) revise FDI, technology & knowledge transfer from Nordic to Baltic countries. Borsos et al (1995) promote FDI and trade flows between the Nordic Countries and The Baltic States.…”

Innovative Foreign Direct Investment Policy: Latvia’s Case

“…Foreign direct investment (FDI), as an additional source of capital, is an essential determinant of economic growth in most countries (Mazzanti et al, 2020;Khan et al, 2020;Kaliyeva et al, 2020;Mehmood et al, 2021;Shmarlouskaya et al, 2021;Karpenko et al, 2021). In addition, the host countries, as many authors rightfully claim, considerably benefit via technology transfer resulting from the presence of FDI (Cieslik et al, 2016;Hilkevics and Hilkevics, 2017;Rausser et al, 2018;Khalatur et al, 2021;Buhaichuk et al, 2021;Burinskas et al, 2021;Kucera and Fiľa, 2022;Radavicius and Tvaronavicienė, 2022). However, not all inward FDI brings benefits to the host country.…”