Analysis of investment activity in the Baltic region

Abstract

The article studies the role of foreign capital in the Baltic countries. The subject of the study is the structure and dynamics of foreign capital in Latvia, Lithuania and Estonia. The goal is to analyze the influence of foreign capital on the economic development of the Baltic countries. The objective is to consider in more detail the flows of foreign direct investment, portfolio investment and other types of investments, to identify the main investor countries, to consider the balance of payments and to construct regression models of influence of foreign capital on the economic development of countries. General scientific methods are used: scientific abstraction, comparative, method of analysis and synthesis, systematization and generalization, method of calculation, and also a method of regression analysis. The following results are obtained: investment activity is an important component for the economies of the Baltic countries. The leader in attracted capital not only in the region, but also in the EU is Estonia, and in terms of investment abroad – is Lithuania in the Baltic region. The main areas where capital is directed are: financial sector, industrial and IT-technologies. Regression analysis shows that the outflow of capital from the Baltic countries abroad positively affects the development of their economies. Conclusions: the balance of payments regulation for Latvia should take place only by increasing the "credit" part of the current account, and for Lithuania – by increasing both the current account and the investment liabilities, because there is the inverse dependence of GDP on investment income, which is directed to foreign investors in the model for the first country, while for Lithuania there is a direct dependence of exports on investment income abroad.