Andreas Cornett


Trade and foreign direct investments as measures of spatial integration in the Baltic Sea Region

Andreas Cornett, Folke Snickars

Geographia Polonica (2002) vol. 75, iss. 2, pp. 35-55 | Full text

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The purpose of the current article is to provide a closer look at the processes of economic transition and integration in the Baltic Sea Region (BSR) since the early 1990s. Focal points are regional and sub-regional integrative processes with regard to trade and foreign direct investment. Three complementary aspects of integration of the BSR are addressed. The first is a critical assessment of the BSR as a region within the European economic system. Secondly, on the basis of an analysis of economic flows within the region and to the outside the paper tries to evaluate whether the BSR constitutes a coherent functional economic region. Finally, an attempt is made to identify sub-regional economic units within the BSR. The analysis of economic linkages in the Baltic Sea Region shows no unequivocal picture of the BSR in the European spatial system. An evaluation of the pattern to bilateral trade and FDI flows within the region and between the region and external partners allows it to be concluded that most countries have more intensive relations with outside partners than with countries within the region. This does not mean that internal trade and FDI are unimportant. On the contrary, it seems that intra-BSR linkages are of major importance for the three Baltic countries in particular. The latter is also indicated in the results of industrial networking study. Similar indications are found with regard to the spatial concentration of foreign direct investment in the industrial networking survey. The analysis of economic linkages in this paper cannot prove that the BSR is a functional region according to the common understanding of the concept. External linkages are stronger than internal. This does not mean that integration is failing to take place in the BSR. We have found indications of geographical concentration of linkages (sub-regional integration) as well as close sectoral cooperation.

Keywords: economic transition, regional and sub-regional integrative processes, trade, foreign direct investment (FDI)

Andreas Cornett, University of Southern Denmark, Grundtvigs Alle 150, DK-6400 Soenderborg, Denmark
Folke Snickars, Royal Institute of Technology, Fiskartorpsvagen 15A, SE-100 44 Stockholm, Sweden